EURUSD: EUR to USD Elliot Wave Points to More Upside From Here

Summary:

The EUR to USD pair could be heading higher, according to the Elliot wave pattern that is alos supported by the short and medium moving averages.

The EUR to USD (EURUSD) price is up by 0.25% today as the market continues to focus on US stimulus talks. It is trading at 1.1847, which is the highest it has been since September 21^st.

The euro has risen since September 28, when the pair bottomed at 1.1615. The upward trend has been mostly because of the ongoing stimulus talks in the United States. According to the White House chief of staff, talks are ongoing about how to provide the much-needed finances to support the economy.

The White House has put in place a $1.8 trillion package that will provide direct funding to individuals and companies, including the vulnerable airlines. Congress, on the other hand, has put in place a $2.2 trillion package that provides funds to individuals, companies, and states.

Still, it will be a difficult thing for the US to have a stimulus before the election. For one, a deal needs to pass senate, where Republicans have the control. And, most of these members don’t agree to any funding that goes above $500 billion.

A stimulus deal would be bullish for the EURUSD price because it would eliminate a risk of a longer downturn in the United States. Indeed, Economists, including those at the Fed have called for the passage of the deal.

The EUR to USD price is also rising as US equities rise. Futures tied to the Dow Jones are up by 172 points while those tied to the S&P 500 index have risen by more than 25 points. This increase is because of optimism of stimulus, the relatively strong earning season, and the ongoing deal-making. In another deal, Pioneer Resources said that it would spend more than $4 billion to buy Parsley Energy.

EURUSD Elliot Wave Analysis

The daily chart shows that the EUR to USD pair has been rising since bottoming at 1.0642 in March. The pair rose and reached a high of 1.2000 in September. During this climb, the EURUSD has formed an Elliot wave pattern, and is currently in the fifth wave.

This means that if the wave holds, it will likely continue rising and move above 1.2000 in the near term, which could be in early November. This trend is supported by the 25-day and 15-day moving averages. On the flip side, a move below the support of 1.1612 will invalidate this trend.