The EUR/USD is pressing a resistance level that is critical from an Elliott Wave technical analysis perspective.
We’ve written about several times through December 2015 how the September 3, 2015 low of 1.1087 is critical to the medium term outlook for the pair. A break above 1.1087 essentially eliminates the immediate bearish outlooks and increases the probability of a push to 1.14-1.17.
As a result, we will look to initiate a long position on a break above 1.1090 with an ultimate target near the August 2015 high near 1.17.
Market Interpretation
Market Condition: Breakout
Entry: 1.1090
Stop Loss: 1.0800 (-290 pips)
First Target: 1.1400 (+310 pips)
Second Target: 1.1720 (+630 pips)
In the article below, a break above 1.1087 eliminates scenario #1 and leaves scenarios #2 & #3 still viable. The preferred count, scenario number 3 is show above and suggests we are in a ‘C’ wave higher that likely retests 1.1720.
FXCM’s Speculative Sentiment Index (SSI) is favoring this move as well as we’ve seen the sentiment reading drop like a rock from -1.4 to -2.2. Price tends to move opposite of SSI so with SSI dropping, look for price to continue higher.
Watch the live SSI feed near this 1.1087 critical level. If SSI continues to drop on a break higher, that increases the probability of scenario #3 in the December 11, 2015 post below.
Suggested Reading: Buy or Sell – EUR/USD Prepares for FOMC Meeting
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