Eurodollar (EURUSD) floats above the 1.21 handle at the time of writing, closing the week on positive footing after printing a local low at 1.1951. The pair’s trajectory remains positive above 1.1923 as it remains on an impulsive mode due to wave 4 being outside the territory of wave 1.

Impulse Intact Above 1.1930

Despite 1.1930 marking the invalidation low of this impulsive wave, should prices stay firm above the recent rejection low of 1.2083, EUR/USD could continue higher. The registered intraday low has now formed a cluster between the 50% Fibonacci retracement of pink (iii) and the descending trendline of the open diagonal in blue 4.

Count II SuggestsaDouble Three

Should prices remain above the said cluster, the likelihood of extending to 1.2559 will increase. The target is equal to blue 3’s length. Why equal? Because the 61.8% extension has already been taken out at1.2327. However, should prices break 1.2055, the chances of slipping lower will increase. In that scenario, a complex correction can be expected as the upside would not be an impulse any longer.

Although we could still move higher, chances are slimmer now that prices registered a local top at 1.2150 as this makes a cluster between the 50% Fibonacci retracement of black encircled w and the psychological price handle. Still, an extension up to 1.2193, where the golden ratio lays, is not such a bad scenario before turning lower.

Has the Upside Ended Already?

Note that a break into blue 1’s territory would not necessarily mean that the upside has ended, but that the upside wave remains motive, however, not impulsive. Such scenario would most likely remain valid should prices stay above blue 2 at 1.1744. Otherwise, the top is already in at 1.2353, and a reversal to fresh lows in place.

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