FX.co ★ EUR/USD analysis for February 8, 2013

EUR/USD Elliott Wave
Since our last analyses the EUR/USD pair was trading downwards, corrective wave (C) (coloured green) of the bigger (4) wave (coloured red) was developing. Yesterday during the Asian session we could observe ascending movement toward the 1.3577 level and we can consider this move as the end of the corrective wave (B) (coloured green) of the bigger (4) wave (coloured red). Therefore, during the European and New York sessions this currency pair did not manage to hold this level and the price started pushing lower reaching new lows at 1.3370 level. Today the EUR/USD pair is trading around 1.3420 level and we are expecting to see the price lower until sub-wave 5 (coloured blue) is over. In accordance with our wave rules and taking into account that the wave 5 should retrace 100% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.3340 (100% of wave 1). To reduce the risk, we can use invalidation at 1.3492 level as stop loss.

Support and Resistance
(S3) 1.3241 (S2) 1.3320 (S1) 1.3369 (PP) 1.3448 (R1) 1.3527 (R2) 1.3576 (R3) 1.3655

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.3440 with stop loss 1.3492 and take profit at 1.3340 are recommended.