Here is an Elliot Wave technical analysis on EUR/USD from Goldman Sachs for the week ahead (report dated 07 November 2014).

EURUSD has met its minimum target for a 5th wave…

  • The minimum target for wave 5 of 5 from May comes in at 1.2395; the low has been 1.2358
  • This level is a 1.00 multiple of wave 1 and, if held as support, it could basically suggest that a full 5-wave sequence has already completed
  • Although it’s feasible that wave 5 could go as far as 1.2090 (which is 1.618 times wave 1), it is now more important than ever to watch very carefully for any signs of the market basing
Elliot Wave technical analysis on EUR USD from Goldman Sachs for the week ahead report dated 07 November 2014

Ultimately, 1.20 seems it should be the ideal level…

  • It encompasses both the extended wave 5 target (1.2090) and the target provided by the Jul. ’12 wedge (1.2043)
  • The actual levels are 1.2090 (1.618 times wave 1) to 1.2043 (the Jul. ‘12 low)
  • Even still, the market is now within range of three previous cycle lows since ’08; 1.2331, 1.2490 and 1.2043. So ultimately it’s an area which requires a little bit of caution going forward
  • Once a full 5-wave sequence is in place, markets are prone to entering a corrective phase which might last a third of the time it took to decline. Whether its from here or from 1.20, once wave 5 is done, EURUSD could in theory enter ~1-2 months of range-bound/messy price action taking it side-ways possibly even higher.
Elliot Wave technical analysis on EUR USD from Goldman Sachs for the week ahead report dated 7 November 2014