FX.co ★ The EUR/USD Wave Analysis for January 19, 2012

Wave analysis:
During the yesterday’s trading session the EUR/USD pair continued ascending thus forming the internal 5-wave structure of the wave A belonging to the current upward correction. Regarding the inner dimension of the wave A we can suggest that it will finish the development near the last day’s maximums. After this the currency pair is to decrease within the limits of the prospective correctional wave B. At the same time concerning the current dynamics of the quote growth the top of the wave A will be probably located near the figure 29 or even near the level 1.2970.

Targets for the variant with the wave A:
1.2900 – downward trend line
1.2973 – 38,2% according to Fibonacci

Targets for the variant with the wave B:
1.2728 – 11.4% according to Fibonacci

General conclusions and trading recommendations:
On Wednesday the pair continued the formation of the uprising corrective part of a trend. Proceeding from the general wave picture we can suggest with some restraints that the global descending trend is completed. However, the fact that the price is still within the limits of the down channel indicates that the downward part of a trend is still active. Also the weakness of the present euro can turn the pair downwards forming a new part of descending trend. At the moment the wave with the target 1.2973 is likely to be formed responding to 38.2 % according to Fibonacci. The inner dimension of the wave A indicates the possible quote decline within the wave B almost from the current levels.