EUR/USD managed to bounce back from the 9 year lows seen last week, but it is far from an “all clear†mode.
The team at Goldman Sachs note the long term wedge and the targets at very low levels:
Here is their view, courtesy of eFXnews:
EUR/USD has now satisfied its L/T wedge target at ~1.20 (Jul. ‘12 low), notes Goldman Sachs.
“It’s also gone through a series of three previous lows from ’08/’11/’12 all set near 50% of the initial ‘00/’08 rally (~1.18-1.23) and so far there has been very few material corrections,†GS adds.
From an Elliott wave perspective, GS notes that EUR/USD eventually looks as though it could retrace ~61.8% to ~1.1237 and this decline would in turn complete a multi-year ABC (which began in ‘08) and subsequently the second wave of a LT bullish sequence which originated in ’00.
“In short, 1.12 is likely the level to be watching for signs of a meaningful base,†GS projects.
Near-term, GS thinks that the next support appears to be 1.1598 as this level is derived as 2.618 times the length of wave 1 taken from the May 8 th high.
“If viewed as an extended wave-5, this might be the next plausible downside target having already exceeded the 1.618 target which was up at 1.2090,†GS argues.
“It’s hard to point out any sort of immediate resistance; ultimately ~1.20 will be a big physiological level,†GS adds.
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