- EUR/USD is building an ascending wedge chart pattern. A breakout indicates one more push higher as part of wave 5 (orange) of wave A (grey).
- On the 1 hour chart, we can see the ABC (green) pattern within potential wave 4 (orange). Now price action could be ready for one more push up in wave 5 (orange).
- Price action can either break immediately or first make a pullback to test the Fibonacci support levels. Both scenarios are bullish.
Let’s review the bullish pattern, the expected targets, and when should the bears retake back control.
Price Charts and Technical Analysis
The EUR/USD break above the 144 ema was impulsive. This is typical for a wave 3 (orange) pattern.
This was the main reason why we expected a shallow and choppy wave 4 (orange). The correction did indeed bounce at the 50-61.8% Fibonacci support zone.
Here are the main scenarios:
- Price action is now testing the resistance trend line (orange)
- A bullish breakout (green arrows) is needed to confirm the upside
- The main targets are the Wizz levels at 1.12175 and 1.2225. Although price action could even retest the top.
- A bearish bounce (orange arrows) could take place at the targets as price action finishes wave A and retraces for wave B (grey).
- A bullish bounce (blue arrow) should create a wave C (grey) within wave B (pink) and more downside (red arrow).
- An immediate bearish breakout means that the wave 5 (grey) has already been completed and price action is in a wave B (grey) as long as price stays above the bottom (red circle).
On the 1 hour chart, we can see the ABC (green) pattern within potential wave 4 (orange). Now price action could be ready for one more push up in wave 5 (orange).
Price action can either break immediately or first make a pullback to test the Fibonacci support levels. Both scenarios are bullish. This remains valid as long as price action stays above the bottom of wave 4 (orange). 
