FX.co ★ EUR/USD analysis for May 07, 2013

EUR/USD Elliott Wave
Since our last analysis the EUR/USD pair has been trading downwards, impulsive wave 3 (coloured blue) of the bigger wave 3 (coloured green) has started its development. Yesterday, during the Asian and European sessions we could observe descending movement from 1.3141 towards the 1.3093 level. Therefore, during the New York session this major currency has continued trading in a bearish mood and the price has dropped to the new daily low at 1.3053 level. At the moment the EUR/USD pair is trading around 1.3077 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 3 should retrace 161.8% of the waves 1, we can define the potential targets with measuring wave 1 with take profit at 1.2950 (161.8 % of wave 1). To reduce the risk, we can use invalidation at 1.3110 as stop loss.
Support and Resistance
(S3) 1.2952 (S2) 1.3002 (S1) 1.3039 (PP) 1.3089 (R1) 1.3126 (R2) 1.3176 (R3) 1.3213
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 1.3050 with stop loss at 1.3310 and take profit at 1.2950 are recommended.