The end of last week ruined a number of great trades, all positions closed at breakeven. We are looking to re-enter on the EURUSD this afternoon as the analysis is still valid as there has not been a lower low in the price action. The DXY is also trading inside a rising bear flag structure, a breakdown from here should open the doors for a move into the 103 support zone. Whilst the long term trend favours the dollar bulls, we are expecting a corrective decline on the DXY over the next few days, which should play into a rally on the EURUSD.
DXY 4 Hour Chart
EURUSD 1 Hour Chart
The Elliott wave count is signalling a 5-3-5 wave structure, which is an ABC corrective rally. The wave B decline has potentially completed at the 1.0360 low. We are expecting a rally to the upside which would complete the wave C rally.
Trade Setup: Buy market execution, current price 1.0534, stop loss 1.0444 and take profit 1.0934.
Stop loss: 90 pips
Take profit: 400 pips
There is a chance to add a second position at the 1.0603 resistance level once the price action rallies to the upside. Once confirmed I will let you know of a second entry position.