On a daily timeframe, EURUSD broke a mid-term aggressive (orange) trend line – which so far supported a long wave 3, creating the largest correction since beginning of September (green rectangles). Still, just a second day of this profit-taking turned out to be a hammer and propelled a counter-move from the bulls on the pair.  After then up trend start to continue.
This up move could be just subwave “b” in irregular or running correction so we can expect wave “c” which could end the bigger wave 4. Subwave “b” could potentially end up at 138,2 – 150% Fibonacci outer retracement (area 1,4125 – 1,4150). If level 1,3776 (bottom of wave “a”) is broken then we will have irregular correction (wave “c” ending below the bottom of wave “a”) which could end in area 1,3700 – 1,3500 (23,6% - 38,2% of wave 3). Otherwise, this will be a running correction, but in both cases there could be one more upward movement - wave 5, which could end bigger wave (3/C) drawn on the monthly timeframe.

Daniel Kostecki, Technical Analist of Financial Markets

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