close icon

EURAUD Bears Getting Tired. Bullish Reversal Ahead?

With only one day left, the Euro seems poised to end November in positive territory against the U.S. dollar, following a sharp decline in October. Unfortunately for the bulls, the European currency is still losing to some of its other rivals this month. EURAUD, for example, is down by over 460 pips since the start of November.

Is there end in sight for the bulls’ suffering? What are the odds of the Euro recovering against the Australian dollar? These are the questions whose answers we hope to find with the help of the Elliott Wave Principle and the 4-hour chart below.
Elliott wave chart EURAUD Forex pair
The 4-hour chart of EURAUD reveals the structure of the entire plunge from the high at 1.6358 reached on October 11th. It also gives us a couple of reasons for optimism. First, the pair’s decline can easily be seen as a five-wave impulse. The pattern can be labeled 1-2-3-4-5. The sub-waves of wave 3 are also visible and wave 5 is still in progress.

According to the theory, a three-wave correction in the opposite direction occurs after every impulse. This means that once wave 5 makes a new low, a bullish reversal should be expected. If this count is correct, an unpleasant surprise awaits those traders, who join the bears near 1.5500.

The MACD indicator is the other thing which gives EURAUD bulls hope. It shows a bullish divergence between waves 3 and 5, indicating the selling pressure is easing.

To sum things up, this analysis suggests EURAUD is about to change direction soon. In our opinion, it is too late to sell. The anticipated recovery can  lift the pair to the resistance of wave 4 near 1.5800. On the other hand, it is still to early to buy either, since nobody knows the exact price level of the bullish reversal. In such cases we believe staying aside until the reversal actually occurs is the best policy.

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover similar opportunities (and dangers) yourself!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

EURUSD Reversal Needed “Breathing Space”

EURUSD plunged below 1.1260 earlier today. The pair has been steadily declining during the last twelve months and the latest drop suggests a new low is very likely to be reached soon. But it wasn’t all that clear two weeks ago, when the Euro was hovering around 1.1400 against the U.S. dollar. Then the Elliott…

Read More »

A Month Ahead of USDCAD ‘s Bullish Reversal

USDCAD finished 2018 in a positive mood. The pair reached 1.3665 on the last day of last year, but 2019 has not been so generous to the bulls so far. By February 1st, the rate was down to 1.3069, losing over 4.3% in just a month. But let’s take a step back and see where…

Read More »

EURNZD: Is February Going to Mimic December?

It was November 30th, 2018, when we last talked about EURNZD. The pair was trading near 1.6570, following a sharp selloff from as high as 1.7929 in less than two months. After such a huge and fast decline, traders were understandably very pessimistic about the pair’s prospects going into December. However, extrapolation is a dangerous…

Read More »

GBPNZD: Reversal in Place, Negative Outlook Intact

Less than two weeks ago, GBPNZD was hovering near 1.9160, following a recovery from as low as 1.8127. After a 10-figure rally in just a month and a half, the bulls were getting more and more confident in their ability to keep pushing the pair higher. Unfortunately for them, the market was already sending a…

Read More »

GBPNZD: A Bearish Elliott Wave Cycle is Worrisome

Three weeks ago, GBPNZD was hovering around 1.8900, but the Elliott Wave principle suggested the recovery from 1.8125 was “far from over.” A three-wave pullback was supposed to occur, followed by another rally towards the resistance area between 1.9250 – 1.9630. The chart below, published on January 2nd, explains. The recovery from 1.8125 looked like…

Read More »

NZDUSD Fibonacci Bounce Causes Optimism

At the start of December, 2018, NZDUSD almost reached 0.6970. A month later, the “flash crash” which brought chaos to many other Forex pairs, dragged the New Zealand dollar to 0.6586 on January 2nd, 2019. As of this writing, NZDUSD is hovering around 0.6760 and the bulls are probably wondering whether this is a chance…

Read More »

GBPNZD ‘s Elliott Wave Recovery Far from Over

A month ago we shared our view that despite being long-term bearish on GBPNZD, we thought it was time for a notable recovery. While the pair was hovering around 1.8400, the market was sending a message that a recovery to roughly 1.9000 was around the corner. As always, this message had nothing to do with…

Read More »

More analyses