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EURUSD: Temporary Recovery Underway; 1.24/1.25


July 27 2012

EURUSD recovered sharply yesterday through the falling resistance line, connected from early July. This break and more importantly daily close above that line suggests that EURUSD has reached a temporary bottom and that larger recovery, minimum in three waves, is underway. Why in three waves!? Becasue in Elliott Wave theory corrections are subdivided always by at least three legs. In fact, current rally from the lows is clearly impulsive, which represents either wave 1 or A, but in both cases we will be looking higher, towards 1.2400 and 1.2500 in coming days while 1.2040 low is in place.Traders will be looking for long opportunities after wave 2/B pull-back.

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