
After falling to 1.0460 in the middle of March, the bulls on EURUSD managed to fight back, which led the pair to 1.1050 in the end of the same month. However, the exchange rate has been locked inside this range ever since, which indicates for a balance of forces. Should we expect this balance to be violated soon. If yes, in what direction? These are the questions we will try to answer by applying the Elliott Wave Principle to the chart below.
As visible, the sideways movement has been developing in three-wave structures so far, each of them smaller than the previous one. This brings to mind the idea of a triangle pattern. Triangles are sideways corrections, consisting of five waves, labeled A-B-C-D-E. It seems we have to wait for waves D and E to complete wave (4), before wave (5) to the downside begins. If this is the correct count, the bulls should not get too excited with the recent recovery, because the euro is likely to stay under bearish pressure.