Peter Smith
⬤ EUR/USD pushed higher this week, staying comfortably above key support levels while moving through what looks like the final stages of its Elliott Wave pattern. Technical analysis points to this being the last leg of a five-wave rally that kicked off from the November 22 low. The price chart shows a clean series of higher highs and higher lows, which typically signals a maturing uptrend rather than a fresh breakout just getting started.
⬤ Based on the Elliott Wave count, EUR/USD looks like it's working on its fifth and final wave up after wrapping up an earlier corrective phase. The chart breaks down several internal wave patterns, showing momentum has held up well while respecting the crucial 1.1610 invalidation level. As long as price stays above this mark, there's room for one more push higher before the broader pattern wraps up. The analysis specifically notes that selling here isn't advisable given the ongoing upward momentum in the wave structure.
⬤ While the near-term direction stays bullish, the Elliott Wave framework also hints that upside could be capped once this final wave finishes. The chart suggests that after completing all five waves up, EUR/USD will likely shift into a larger three-wave corrective pullback. This kind of retracement typically follows extended moves and often brings increased volatility as traders adjust their positions. The structure indicates any additional gains would represent the tail end of this advance rather than the start of a sustained breakout.
⬤ This setup matters for the broader currency market because it signals a potential turning point in EUR/USD's trend. When a five-wave advance completes, consolidation or corrective action usually follows, which can ripple across other euro pairs. Until price breaks below 1.1610, the outlook favors that final push higher, but the larger picture suggests caution will become appropriate once that move plays out. The next few trading sessions could be critical in determining whether EUR/USD transitions from trend continuation into correction mode.
Peter Smith
