EUR/USD: Volatility Analysis
Price in Correction, Possible Downtrend
On the daily chart, the first wave (1 of (A) of B) at a higher level has been completed, and the second wave (2 of (A) of B) is currently in progress. At present, the downward wave (c of 2) is unfolding, with the third wave (iii) of c developing at a lower level. If this hypothesis is correct, EUR/USD could decline to the range of 1.0441 to 1.0214. The key stop-loss level for this scenario is 1.0935.
Main Scenario
- Entry Below 1.0935: A short position will be valid below 1.0935, with a target price in the range of 1.0441–1.0214.
- Timeframe: 7 days or more.
Alternative Scenario
- Break Above 1.0935: If the price breaks above 1.0935 and consolidates, there is potential for an upward movement to the range of 1.1214–1.1470.
Scenario Details
| Scenario | Timeframe | Recommended | Entry Point | Take Profit | Stop Loss | Key Levels |
|---|---|---|---|---|---|---|
| Main Scenario | Weekly | SELL | 1.0715 | 1.0441, 1.0214 | 1.0935 | 1.0214, 1.0441, 1.0935, 1.1214, 1.1470 |
| Alternative Scenario | Weekly | BUY STOP | 1.0940 | 1.1214, 1.1470 | 1.0850 | 1.0214, 1.0441, 1.0935, 1.1214, 1.1470 |
Trade Plan
Based on this analysis, consider the following:
- For the Main Scenario: Look for short opportunities below 1.0935, targeting 1.0441–1.0214 with a stop-loss at 1.0935.
- For the Alternative Scenario: If EUR/USD breaks and holds above 1.0935, consider buying with a target of 1.1214–1.1470 and a stop at 1.0850.
Monitor the price action around the key levels, especially 1.0935, as this will determine the direction of the next move.
