“Search, Analyse, Trade” is a series of Price Action and Elliott Waves analyses. Its detailed step-by-step description can be found over here. I invite you to today’s review of selected currency pairs and potential trading opportunities. The analyses are based on the Dukascopy sentiment that you can get here.
EUR/USD reached support zone last week. The reaction was positive, the support was defended by a strong growth impulse. We are currently watching its correction, which took the form of a simple correction. If the impulse was not a wave C of irregular correction, then we should see its continuation. If, however, the pair deepens declines, we will see another attempt to attack the defended zone. Its overcoming should lead to movement towards level 1.1580.
The sentiment remains neutral and allows the position to be opened. If the pair overcomes this support, I will look for a short due to implementation of the emerging formation of the head & shoulders.
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GBP/USD rejected the resistance zone on Friday and from that moment we can see a strong downward impulse, which once again reached the upper limit of the last consolidation. This movement is five, so it is possible that after correction we will see its continuation. It would mean overcoming key support and moving towards the trend line.
The sentiment does not allow opening a short position. Players count on defense of support and another upward wave. I can not find a scenario in which the current drop is a C wave of irregular correction, which is why I think that this move will be continued. That’s why I stay on the side.
USD/JPY creates right arm of the RGR formation. The resulting upward movement within its right shoulder is an impulse and has reached the resistance zone. As in the above pairs, if it is not an irregular wave C, we should see another attempt to continue the increases. A drop below the neckline will mean the implementation of the formation and the continuation of the decreases towards the last low.