FX.co ★ EUR/USD Wave Analysis for December 13, 2012

EUR/USDElliott Wave

For the last few days the EUR/USD pair was trading in an upward move, impulsive 1 wave (coloured blue) of the bigger (5) wave (coloured green) was developing. Yesterday during the Asian and European sessions we could observe strong ascending movement from 1.2995 towards the 1.0397 level. Therefore, during the early New York session this major pair did not manage to hold this levels and the price started pushing lower reaching a new session’s low at 1.0354 level. Today the EUR/USD pair finished development of the 1 wave at 1.3100 level and we expect to see the price lower in the next few days. In accordance with our wave rules and taking into account that the wave 2 should retrace 50% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.2988 (50% of wave 1). To reduce the risk, we can use invalidation at 1.3100 level as stop loss.

Support and Resistance

(S3) 1.2911 (S2) 1.2953 (S1) 1.3013 (PP) 1.3055 (R1) 1.3115 (R2) 1.3157 (R3) 1.3217

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.3055 with stop loss 1.3100 and take profit at 1.02988 are recommended.