FX.co ★ EUR/USD analysis for May 10, 2013

EUR/USD Elliott Wave
Since our last analysis, the EUR/USD pair has been trading downwards, just as we expected, impulsive wave 1 (coloured blue) of the bigger wave (3) (coloured green) has finished developing. Yesterday, during the Asian and European session we could observe descending movement from 1.3176 towards the 1.3084 level and we can consider this move as the end of the wave 3 (coloured red).Therefore, during the New York session this major currency has continued trading in a bearish mood and price reached a new low at 1.3011 level. At the moment the EUR/USD pair is trading around 1.3000 level and we are expecting to see price higher in the next few sessions.In accordance with our wave rules and taking into account that wave 2 should retrace 61.8% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.3115 (61.8% of wave 1). To reduce the risk, we can use support point at 1.2980 level as stop loss.

Support and resistance
(S3) 1.2908 (S2) 1.2972 (S1) 1.3012 (PP) 1.3075 (R1) 1.3139 (R2) 1.3179 (R3) 1.3242

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upwards movement. That is why long positions at level 1.3015 with stop loss at 1.2980 and take profit at 1.3115 are recommended.