EUR/USD: Tactical Countertrend Bounce on 5-Wave Exhaustion
EUR/USD: Tactical Countertrend Bounce on 5-Wave Exhaustion
FX TECHNICALS | EUR/USD: Tactical Countertrend Bounce on 5-Wave Exhaustion
*Spot Ref: ~1.1099*
EUR/USD is flashing classic late-cycle exhaustion. A 5-wave impulsive selloff appears complete, underpinned by bullish momentum divergence and low-volume node absorption. Tactical bias flips constructive (countertrend) for an ABC corrective squeeze, provided the Wave 5 floor holds.
### The Setup
* Wave Count: Full 5-wave bearish sequence looks exhausted. Wave 3 delivered the core displacement, Wave 4 consolidated sideways, and the final Wave 5 push into fresh lows lacked conviction.
* Momentum Divergence: Price printed marginal lows while oscillators carved out higher lows—textbook seller fatigue. Downside velocity is stalling.
* Market Profile: Price is rotating inside a low-volume exhaustion tail with early signs of local balance/absorption. Sellers are failing to press the advantage.
### Key Levels & Roadmap
| Zone | Level / Area | Significance |
| --- | --- | --- |
| Immediate Resistance | Local intraday swing highs | Trigger level; clearing this confirms the ABC bounce is live. |
| First Objective | 38.2% Fib / Prior breakdown node | Initial profit-taking zone and volume shelf test. |
| Primary Target | 50.0% – 61.8% Fib | Key structural resistance; decides if this is just a dead-cat bounce or a broader trend shift. |
| Hard Invalidation | Wave 5 Low | Clean impulsive break below kills the count, wipes out divergence, and opens Wave 3-style extension lower. |
### Desk Takeaway
Do not chase the lows. Look for price to hold the local base and reclaim immediate intraday resistance to trigger an ABC squeeze into the 38.2%–61.8% retracement pocket. Hard stop below the Wave 5 low—if momentum confirms a breakdown, step aside.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!