07.02.202316:25 Forex Analysis & Reviews: EURUSD wave analysis for February 7th, 2023

Red lines- bearish channel

EURUSD is clearly in a short-term bearish trend as price is making lower lows and lower highs. Price has formed a downward sloping channel and is currently on its final 5th wave from the recent highs of 1.1033. Once the 5th wave is complete, the decline from 1.1033 will be complete and a corrective bounce will follow. The form of the decline suggests that we are at the final stages of the decline. However a 5 wave decline is usually followed by a counter trend bounce and another wave structure of similar direction to the initial 5 waves. In this case since the initial 5 waves are downward, we should expect a three wave (most probable) bounce and then another wave to the downside that will most probably provide a new lower low. The RSI is at oversold levels in the 1 hour and 4 hour charts.