FX.co ★ EUR/USD Ready To Push Higher - Analysis for August 10,2012

EUR/USD Elliott Wave
Since our last analysis the EUR/USD pair was trading in a downward move like we expected, this major pair is currently developing final C wave (coloured purple) of the bigger corrective wave 2 (coloured blue). Yesterday during the European and New York sessions we could observe a strong descending movement towards the 1.2266 level. At the moment the EUR/USD pair is trading around 1.2260 level and we are expecting to see price higher today when the development of the impulsive 3 wave (coloured blue) starts. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (1.2133-1.2441-1.2259) with Take Profit 1 at 1.2563 (100% of wave 1) and Take Profit 2 at 1.2759. To reduce the risk, we can use invalidation point at 1.2133 as Stop Loss. Also it is necessary to monitor the EU French Industrial Production m/m, French Gov Budget Balance and U.S. Import Prices m/m, Federal Budget Balance data that can change the rate of the pair.
Support and Resistance
(S3) 1.2198 (S2) 1.2245 (S1) 1.2273 (PP) 1.2319 (R1) 1.2366 (R2) 1.2394 (R3) 1.2440
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.2310 with Stop Loss 1.2133, Take Profit 1 1.2563 and Take Profit 2 1.2759 are recommended.