After running 400 pips higher two weeks ago, EUR/USD consolidated last week, trading in a range 100 pip range. This week though, we´re witnessing buyers having another assault on the top side.

Looking at the hourly forex chart, we can see that there an Elliot Wave Pattern developing on EUR/USD. On Tuesday morning, the price bottomed out just above 111.

Since then, there has been a one way traffic only, albeit with pauses, as these trends usually unfold. On Tuesday, we saw the first wave of the pattern stretching from 111.10 to 111.90, but in the afternoon the price retraced lower until the buyers regrouped.

Then, the next upward wave of this pattern began yesterday morning. So, EUR/USD pushed higher the entire day, but today we saw another pullback lower, which was the fourth wave; 2 larger waves up and 2 retracement waves.

The 4th wave is complete

This pattern, which you can find on our trading strategies section, consists of 5 waves. We have completed 4 of them so the 5^th wave up is about to begin.

Moving averages act as support during retraces in this pattern, and the 50 SMA in yellow is doing that right now. Yesterday it was the same moving average to provide support and it looks like it is doing the same today, so we´re opening a buy forex signal in order to take advantage of this Elliott Wave patter.