close icon

EURUSD Turns Up Ahead of Brexit Talks Breakthrough

What will EURUSD bring next week? That is the subject of discussion in our next premium analysis due out late Sunday!

EURUSD is up by 260 pips since the beginning of October. The pair climbed from 1.0879 to 1.1140 in just 14 trading days. The rally appears to be fueled by optimism regarding a possible Brexit deal and the tentative “phase-one” agreement between the US and China. In our opinion, however, there is something more to it.

Inspired by Elliott Wave analysis, we have been expecting a bullish reversal in EURUSD for a while. The truth is it could have happened earlier. The pattern we have been tracking for the past several weeks is called an ending diagonal. Take a look at it on the chart below, sent to our subscribers as a short-term update on Wednesday, October 2nd.

Complete Elliott Wave pattern on EURUSD chart

Ending diagonals form in the position of the last wave of the larger sequence. Our full EURUSD analysis included weekly and daily charts in addition to the 4-hour chart above. This helped us put this pattern into the bigger picture and conclude that the larger decline was probably in its final stages.

EURUSD Bulls Unimpressed with Looming Brexit Deadline

The pattern itself consists of five sub-waves, labeled 1-2-3-4-5. Each wave is corrective in structure and waves 1 and 4 overlap. The fact that the shape of the pattern was contracting only strengthened the case for an upcoming bullish reversal.

In other words, at the start of the month, the stage was already set for the breakthrough in the Brexit negotiations reached two weeks later. It was never a sure shot, but while EURUSD was hovering around a two-and-a-half year low, the odds were actually in the bulls’ favor.

Of course, there was no way to predict the outcome of the negotiations. The Brexit saga has been going on for over three years now. Britain’s exit from the EU has been postponed once already. That is why we find Elliott Wave patterns to be a lot more reliable than politics. In EURUSD’s case, it was the ending diagonal we counted on, not Boris Johnson. Fortunately, it didn’t disappoint.

What will EURUSD bring next week? That is the subject of discussion in our next premium analysis due out late Sunday!

Stay informed with our newsletter

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

Privacy policy
You may also like:

USDJPY Pattern Makes More Sense than Politics

The last two weeks were different like night and day for USDJPY traders. The pair fell from 108.47 to 106.48 during the first three days of October and eventually closed the week in negative territory. The last five trading days, on the other hand, told a much different story. Last week, USDJPY rose from 106.66…

Read More »

GBPAUD Elliott Wave Setup Supports the Bears

Between July 30th and August 26th, GBPAUD managed to recover from 1.7561 to 1.8337. Despite the no-deal Brexit prospects, the Australian dollar turned out to be even weaker than its British rival for almost a month. However, GBPAUD is down by roughly 400 pips since August 26th. Traders are probably wondering if this is a…

Read More »

EURUSD Absorbs Economic, Trade War and G-7 News

EURUSD made a new low last week. The pair fell to as low as 1.0963 on Friday adding to the downtrend it has been trading in since February 2018. The last time the European currency traded this low against the greenback was in May 2017. The last few months have been characterized by new lows,…

Read More »

Trump Didn’t Drag USDJPY Down. Elliott Wave Did

USDJPY plunged sharply last week after President Trump’s latest China tariff threats. The pair reached a high of 109.32 on Wednesday, July 31st, but finished the week below 106.60 on Friday. However, just because something happens after something else, it doesn’t mean there is causation between the two. In USDJPY’s case, the stage was set…

Read More »

GBPNZD Falls as No-Deal Brexit Looms

The possibility of a no-deal Brexit received another boost after Boris Johnson became Prime Minister of the UK. The market, however, doesn’t seem to like those prospects. The Pound Sterling has been losing ground against the Euro, the Aussie, the US dollar and other rival currencies. GBPNZD is down, too. Less than three months ago,…

Read More »

USDCNH Looks Bearish in the Midst of a Trade War

Less than a month ago USDCNH rose to 6.9621 and it looked like reaching a new multi-year high above 7.0000 was only a matter of time. Unfortunately for the bulls the market chose otherwise. USDCNH fell to 6.8164 on the last day of June. As of this writing, the pair is hovering around 6.8755 following…

Read More »

USDCHF Bears in Charge. Time for a New Key Level

On May 30th USDCHF was trading near 1.0100 in an attempt to recover from a decline from 1.0238 to 1.0009. The bulls had managed to add more than 90 pips and seemed determined to get the job done. Unfortunately for them, there was an Elliott Wave pattern suggesting their efforts were most likely going to…

Read More »

More analyses