EUR/USD: Next Resistance At 1.2200/1.2220

Yellen has made the case for more stimulus so stocks are pushing price higher once again while the is down ahead of Biden’s inauguration.

Notice that stabilized around 1.2050 area after the price retraced back to the starting point of the wedge pattern, also know as ending diagonal. This was actually a perfect textbook development following a wedge top formation at 1.5250. But now, the question is, where from here? Based on Elliott wave theory, I think that drop from 1.2349 is strong so ideally it’s still only wave A of a higher degree three wave structure that will be expected to resume after wave B rally that can stop at 1.2220 resistance zone.

This view remains unchanged as long as market trades below 1.2349.

EUR/USD, 4h
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