The EUR/USD made a bearish reversal when testing the previous top. As expected in our previous analysis, price action made a bullish ABC pattern.

This article will review what to expect next from the Elliott Wave analysis, Fibonacci levels, and chart patterns.

Price Charts and Technical Analysis

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The EUR/USD is expected to make a full bearish price swing in wave C (pink) after completing a bullish wave B (pink):

• The EUR/USD made a head and shoulders reversal chart pattern (red boxes). There were also divergence patterns between the tops (purple lines). A strong bearish impulse is expected to be wave 1 (grey).
• Price action needs to confirm this bearish outlook by breaking and closing (orange arrows) below the 21 ema zone, 144 ema zone, plus support trend line (green).
• Currently, a bullish ABC (orange) is expected to complete a wave 2 (grey).
• A break below the -61.8% Fibonacci level confirms a wave 3 (rather than a potential wave C).
• A break above the previous top invalidates this bearish outlook (red circle).

On the 1 hour chart, price action is moving up and down around the 144 ema zone. Usually, this indicates a larger range or reversal:

• The bulls seem to have completed a 5 wave pattern (green) within wave C (orange).
• The bearish bounce seems to complete a wave 1 (orange). This was followed by a retracement in wave 2 (orange).
• There are potential trade setups at the resistance trend line (orange) for a bearish bounce (orange arrow). Also a bearish breakout (orange arrow) could be an option.
• The main targets are located at the Fibonacci levels. The -161.8% Fibonacci level is located at 1.1915, which is usually the main target of wave 3 (grey).

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