EUR/USD corrects higher within the 4th wave

EUR Basket – the Euro continues to trade within a consolidating range. With resistance located at 595 and 596, I look for limited upside pressure. Rallies to be sold.

DXY (USD Index) - we have seen a correction to the downside. Support levels are located at 103.20 and 103.18. With the 61.8% Fibonacci support located at 103.19, I look for dips to be bought.

Correlation studies would suggest rallies to be sold in EUR/USD.

EUR/USD - the daily chart highlights the major currency pair breaking out of an expanding wedge formation to the downside. Buyers have emerged close to the 161.8% extension level of 1.0715. This suggests that the current move higher is a fourth wave correction in a bearish Elliott Wave count (5 waves). A common retracement level for a 4th correction is a 38.2% pullback of the last decline. This level is located at 1.0828. Bespoke resistance is located at 1.0821.

Conclusion: I expect intraday price action to be mixed and volatile. The prime short-entry area to join the medium-term bearish trend is between 1.0821 and 1.0828. A move above 1.0877 negates the bearish count.

Resistance: 1.0821 (bespoke), 1.0828 (38.2%), 1.0877 (swing low)

Support: 1.0722 (swing low), 1.0715 (161.8%), 1.0452 (261.8%)