A month ago, on May 18th, we published an article, called “EURUSD To Confirm Bearish Reversal”. EURUSD was trading close to 1.14, when we made that forecast. Those of you, who have been following this pair, know that it fell to 1.0819 on May 27th. However, we were expecting a much deeper decline, which was supposed to reach the bottom of 1.0460. The Market did not think so. EURUSD climbed up to 1.1385 on June 10th and has been ranging between there and 1.1150 ever since. All that price action makes us believe we should expect one more new high before the bears return. Let’s see how EURUSD looks like hours before the FOMC rate decision.
As visible, the whole recovery since the 1.0460 bottom has been developing within a rising channel. Furthermore, it has a corrective overlapping wave structure. The advance from 1.0460 to 1.1465 is a flat correction, labeled W). It appears to be the first pattern of an W)-X)-Y) corrective combination. The decline, which followed should be wave X). Note that it ended precisely at the 61.8% Fibonacci level of wave W). So, the rest of the chart should be part of wave Y) to the upside. Wave B of Y) seems to be a triangle. If this assumption is correct, we should expect wave C of Y) to the north. It has the potential to take the exchange rate to 1.15. However, the bulls should not get too cocky, because the larger downtrend is still in progress and the bears are still here.