After the huge Draghi drama, where is EUR/USD headed next?
The teams at Nomura and JP Morgan provide analysis:
Here is their view, courtesy of eFXnews:
The technical strategy teams at Nomura and JP Morgan provide their insights on the Elliott-Wave analysis and setup for EUR/USD around current levels. Nomura’s view has a shorter time-frame than that of JP Morgan.
Nomura: Once retracement completes, expect another 5-wave rally.
“Euro is correcting the first wave higher from 1.0524. So far the retracement has met the 38.2% Fib at 1.0805. The previous 4th wave low at 1.0789 also offered minor support for this corrective pullback.
S/t, we expect the 1.0800/0780 zone to mark a corrective low but there is scope for a deeper retracement to 1.0750 or 1.0700.
Because we saw a 5-wave rally off the low, we are looking for another 5-wave rally once this pullback completes,†Nomura argues.
JP Morgan:Â Given structures are still endangering the 2015 low at 1.0462.
“Despite the massive short-covering rally of Thursday last week we still see a very high likelihood that we are only dealing with an internal 4th wave recovery which would not penetrate the wave 1 low at 1.1087.
Below the latter the odds remain in favor of a continued and incomplete down-rotation which should at least challenge key-support at 1.0485/62 (wave 3 projection/2015 low).
A break above 1.1087 though would indicate a game change in favor of a broader recovery, which would need a break above 1.1216 (w. trend) to be confirmed,†JPM projects.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.
