EUR/USD Bullish Break Faces Tough 78.6-88.6% Fibonacci Resistance

• EUR/USD remains bullish after bouncing at the 21 ema support zone. But price action will soon reach the critical Fibonacci resistance zone and the previous top.
• Will price action reverse or break? Let’s review the most important Fibonacci, chart, and Elliott Wave patterns on the EUR/USD today.
• The EUR/USD seems to be completing a bullish ABC zigzag (grey) within wave B (pink). This is taking place after price completed a bearish ABC (grey) in wave A (pink).

Price charts and technical analysis

The EUR/USD seems to be completing a bullish ABC zigzag (grey) within wave B (pink). This is taking place after price completed a bearish ABC (grey) in wave A (pink):

1. The wave B (grey) made a retracement to the 38.2% Fibonacci which is the minimum needed to qualify as a wave B – see green boxes on 1 hour chart below.
2. The ABC (grey) pattern is probably an ABC flat correction.
3. A bearish reversal at the resistance zone could confirm the end of the wave B (pink) and the start of the wave C (grey).
4. A bearish price swing (orange arrows) could decline to test the previous bottom.
5. A bullish bounce (blue arrows) could confirm the end of the wave C (pink) and the wave 4 (purple) pattern and the start of the wave 5 (purple).
6. A strong break above the top or below the -27.2% Fibonacci target makes the bearish ABC pattern less likely.

On the 1 hour chart, price action made a break above the previous top (orange box) to confirm an uptrend continuation as mentioned in our EUR/USD video yesterday. The bullish breakout was favored as long as price action remained above the 21 ema zone. Also the strong push away from the 21 emas followed by the shallow pullback favored a wave 3-4 (green) combination. What’s next:

1. Price action completed a bearish ABC (blue) pattern in wave 4 (orange) at a deep 61.8% Fibonacci retracement level.
2. The strong bullish swing is therefore the wave 3 (orange).
3. The current push up is probably a wave 5 (orange) of wave C (grey).
4. There are 5 waves (blue) within the wave 5 (orange).
5. The main bullish target zone is between 1.12050 and 1.2150.