FX.co ★ EUR/USD Wave Analysis for September 18, 2012

EUR/USD Elliott Wave
Last week the EUR/USD pair was trading in an upward move, developing impulsive 3 wave (coloured green) of the bigger (5) wave (coloured orange). Yesterday during the Asian and European sessions, we could observe a descending movement towards the 1.3083 level. Therefore, during the early New York session, this major pair did not manage to hold this level and price reached a new daily high at 1.3171 level. We can consider this move as the end of the (3) wave (coloured green). At the moment the EUR/USD pair is testing 1.3080 support level and we are expecting to see the price around 1.3235 level soon. 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 1 wave, with Take Profit at 1.3234 (100% of wave 1) and Take Profit 2 at 1.3344 (161.8% of wave 1). To reduce the risk, we can use support at 1.3000 level as Stop Loss.
Support and Resistance
(S3) 1.3034 (S2) 1.3068 (S1) 1.3089 (PP) 1.3123 (R1) 1.3157 (R2) 1.3178 (R3) 1.3212
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.3100 with Stop Loss 1.300 , Take Profit at 1.3234 and Take Profit 2 at 1.3344 are recommended.