Recently we were tracking a possible corrective decline from 1.3700 on EURUSD because of the overlapping structure. However, a sharp and extended fall through the 2012 support line with a weekly and monthly close price beneath it forced us to rework the count.
In fact, we decided to check the line chart, where a fall is pretty clean and directional. A move can be counted impulsively and that is a bearish sign for the pair, but we expect a three wave bounce back to 1.3300 in March, before downtrend extends.
EURUSD daily- line chart
EURUSD monthly
The reason why we also turned bearish on EURUSD is the overlay chart below which shows that most of other correlated markets turned lower, but not S&P which is still bullish, yet it remains alone. This could be a sign and S&P is approaching its top.
If this proves correct and if S&P will turn lower from 1560-1600, then the USD will probably accelerate sharply. The greenback is already showing strength without any help from S&P.
Market Correlations
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