Short term
Trade view / 06 July 2016 at 1:13 GMT

EURUSD recovery structure merely corrective

Managing Director / Technical Research Limited
New Zealand
Instrument: EURUSD
Price target:
Market price:

By the New York close markets had recorded a classic risk-off day: the S&P 500 down, bond prices up, oil down, US dollar up. EURUSD was no exception, and the key reversal on the monthly chart for June is still operative. 

Markets are pricing a 0% chance of a rate hike by the Federal Open Market Committee at next week’s meeting; 5% by September and 10% by the end of the year. However, those odds are sure to change, one way or the other, after the US jobs report is released at 0830 EST. 

Ahead of then there is no significant data out of the US or Eurozone so the direction of EURUSD will be determined by whether the risk-off mood gathers momentum. Today’s FOMC minutes cover the pre-Brexit meeting mid June so are unlikely to have much impact on sentiment.

Management and risk description

From an Elliott Wave perspective, the euro’s recovery from its “Brexit day” low of 1.0910 appears merely corrective in its wave structure, arguing for new lows ahead. Resistance now lies around the 1.1100 level and at 1.1130/1.1155 max. for selloff toward 1.0975 en route to 1.0910 and then the 1.0825/1.0800 area (see daily chart below).


Entry: EURUSD is seen as a sell today at 1.1097 and at 1.1124, if seen.

Stop: 1.1161, initially. 

Target: 50% at 1.0926 and 50% at 1.0833.

Time horizon: allow several days for targets to be met.  

EURUSD daily chart (click to expand)
EURUSD daily chart
Source: ThomsonReuters  

EURUSD weekly chart (click to expand)

Source: ThomsonReuters. Create your own charts with SaxoTrader; click here to learn more  

— Edited by Gayle Bryant

For more on forex click here

Non-independent investment research disclaimer applies. Read more
Gennady Gennady
Max, GBR/USD -?
Max McKegg Max McKegg
My 1.2850 Target Today reached already! (enroute eventually to 1.1630) Welcome to contact me my details under Bio on TradingFloor
sutiani sutiani
max your stp euro today?
Max McKegg Max McKegg
sutiani sutiani
Had moved my stop to entry on this trade, payrolls blew it out. Is your view still the same Max?


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