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On the daily chart of EURUSD, we can see price rising for the last year or so, and this rising price action as we can see can be counted in five waves. This five-wave pattern, which we labeled as wave C) is known as a motive wave, and must contain five waves. That said, once five waves within wave C) are fully visible, that’s when a new top can be formed, and a bearish reversal can follow.

Getting more technical now, we see that market can be trading in the 5th and final wave of wave C), which can be approaching some interesting resistance and reversal zones. We are talking about the Fibonacci projection zone of 200.0, measured from end of wave 3 to 4, at 1.1551 level. This Fibonacci ratio can also projection end of wave 5 of C), and consequently a bearish reversal aiming for 1.210 region.

EURUSD, Daily

EURUSD Chart