Recently we were tracking a possible corrective decline from 1.3700 on EURUSD because of the overlapping structure. However, sharp and extended fall through 2012 support line with a weekly and monthly close price beneath it forced us to rework the count. In fact, we decided to check the line chart, where fall is pretty clean and directional. Move can be counted impulsively which that’s s bearish sign for the pair, but we expect a three wave bounce back to 1.3300 in March, before downtrend extends.
EURUSD daily- line chart
The reason why we also turned bearish on EURUSD is the overlay chart below which shows that most of other correlated markets turned lower, but not S&P which is still bullish but alone. This could be a sign and S&P is approaching to its top. If this proves correct and if S&P will turn lower from 1560-1600 then USD will probably accelerate sharply which is already showing strength without any S&P help.