FX.co ★ EUR/USD analysis for May 17, 2013

EUR/USD Elliott Wave
Since our last analysis the EUR/USD pair has been trading downwards, just like we expected, impulsive wave 3 (coloured blue) of the bigger wave (3) (coloured green) has been developing. Yesterday, during the Asian session we could observe descending movement from 1.2888 towards the 1.2846 level. Therefore, during the European and New York sessions this major currency did not manage to hold this levels and the price has pushed higher to the 1.2929 level (new daily high). At the moment the EUR/USD pair is trading around 1.2867 area and we expect to see continuation of bearish mood for the next few day. In accordance with our wave rules and taking into account that wave 3 should retrace minimum 100% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.2771 (100% of wave 1). To reduce the risk, we can use resistance point at 1.2900 level as stop loss.
Support and Resistance
(S3) 1.2759 (S2) 1.2803 (S1) 1.2842 (PP) 1.2886 (R1) 1.2925 (R2) 1.2969 (R3) 1.3008
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 1.2860 with stop loss at 1.2900 and take profit at 1.2771 are recommended.