The EURUSD pair is currently undergoing an intriguing zigzag correction, which, when analyzed through the lens of Elliott Wave theory, points to potential support levels. This correction, unfolding since April 17, 2026, is a complex dance of waves and subdivisions.
The Zigzag Pattern
The initial decline, marked as wave A, ended at 1.1655, followed by a rally in wave B to 1.1796. From there, the pair embarked on a downward journey in wave C, which is further divided into five smaller waves, adhering to the principles of Elliott Wave analysis. This intricate structure highlights the corrective nature of the move.
Wave Subdivisions
Wave ((i)) concluded at 1.1722, followed by a rally in wave ((ii)) to 1.1788. The subsequent decline in wave ((iii)) extended to 1.1608, and now, wave ((iv)) is rallying. The key resistance zone is identified between 1.168 and 1.171, where sellers are expected to re-emerge. As long as the pivot at 1.18 holds, rallies are likely to be short-lived, indicating a continued bearish sequence.
Projecting the Target
The potential target for wave C is calculated using Fibonacci extensions of wave A. The 100% to 161.8% extension range identifies 1.148 to 1.16 as the critical support zone. At this level, buyers are anticipated to step in, potentially leading to a new high above the April 17 peak or a larger three-wave rally.
Implications and Takeaways
This analysis underscores the importance of understanding wave patterns and their implications. While the market's behavior can be complex, Elliott Wave theory provides a structured framework for interpretation. In my opinion, the potential support at 1.148–1.16 is a critical level to watch, as it could trigger a significant shift in the market's direction. Traders and investors should closely monitor this zone for any signs of a reversal or a continuation of the current trend. The market's response at this level will provide valuable insights into the EURUSD pair's future trajectory.
