FX.co ★ EUR/USD analysis for February 4, 2013

EUR/USD Elliott Wave
Last week the EUR/USD pair was trading in a strong bullish move, impulsive (3) wave (coloured green) of the bigger (3) wave (coloured red) was developing. During the Fridays European session we could observe descending movement from 1.3674 toward the 1.3584 level. Therefore, during the New York session this major pair did not manage to hold this level and the price started pushing higher reaching a new highs at 1.3710 level. We can consider this move as the end of the (3) wave (coloured green). At the moment the EUR/USD pair is trading around 1.3584 level and we are expecting to see continuation of the bullish move soon. In accordance with our wave rules and taking into account that the wave 5 should retrace 161.8% of the wave 4, we can define the potential targets with measuring wave 4 with take profit at 1.3790 (161.8% of wave 4). To reduce the risk, we can use invalidation at 1.3478 level as stop loss.

Support and Resistance
(S3) 1.3432 (S2) 1.3502 (S1) 1.3572 (PP) 1.3642 (R1) 1.3712 (R2) 1.3782 (R3) 1.3852

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.3600 with stop loss 1.3478 and take profit at 1.3790 are recommended.