EURUSD Took Out This Year's Lows, But We Are Not Calling the Bottom Yet

As expected, EURUSD has seen an early test of this year's lows and the 1.1050 support area that we discussed before. The market briefly spiked to new lows after Thursday's ECB press conference, and since then we have seen a sharp reversal.

However, this was only a slight push to new lows, which can sometimes happen in irregular formations. So despite that drop and the recent rebound, looking at the 4-hour time frame, it may still be too early to fully confirm the end of the higher-degree decline.

In the near term, we may still see a rally closer to 1.1276, which could be important resistance, either for a wave four flat correction or possibly a larger wave B counter-trend recovery that could later reach the 1.1324–1.1400 resistance area. On the intraday chart, the recovery could even unfold as an impulsive move towards 1.1270 and the 1.1300 resistance area, especially if today's session closes around current levels or higher.

Overall, we think EURUSD may now start trading more neutrally, but the higher-degree downtrend is still not over. In the big picture, we see a multi-year triangle with wave D turning down from the first resistance.

Next week's US jobs report on Friday, November 6, at 14:30 CET could be the next big test for this recovery, so we will be watching closely how price reacts around the 1.1276 resistance going into that release.

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Trade well,
WaveTraders team