Higher US treasury bond yields are causing some reversals in the market, with metals rallying while the US Dollar is lagging. Even better examples are versus commodity currencies.
The Yen (JPY) crosses are also still in an uptrend, with room for more gains after any retracements.
But today we turn to the Euro and Elliott wave patterns for the EURUSD. In general, the Euro (EURUSD) looks to be headed higher despite the contraction of Industrial Production in EU area by 1.6%, while the annual CPI in Germany came out at 4.1%.
Technically, we see a very nice reversal on EURUSD with price coming from new lows. And it is now trading above the channel so there are some chances that the currency pair is bottoming.
We need a rise above former swing highs and back to 1.1660 before we may look for any confirmed “low in place”. But based on daily charts we still think that sooner or later the euro will stabilize, either for wave E rally or even for a fifth wave bounce.
The German Dax is also turning up, reversing from strong technical support near 15000 (likely an end to wave 4). Keep in mind that more upside for the German DAX will likely be supportive for the Euro as well. That said, when looking at some Euro currency crosses we think that commodity currencies can be an even better bet, like AUD or CAD.
The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.