“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 tested the horizontal level of S/R from above and rejected it. Currently, the pair should move towards the upper limit of consolidation within the wave of a hypothetical triangle. Exit over this limit will negate this scenario. Then there will be two. The first one, in which the current increase is the B wave of the larger correction structure and after its completion, we will see decreases in the C wave. The second, in which the fall from the top is A wave with irregular correction extended by zigzag as wave B, and the last drop as C wave making a simple correction. In this case, the pair will overcome the upper limit of consolidation and will move towards the high. At H4 we see that the first rising wave is the fifth, which ends with the irregular correction that created the wave 2B. The current increase is too small and it will probably be extended by another wave. If it is to be a scenario with a triangle, then only one wave will be created, which will complete the combined zigzag. In the case of a scenario with an attack to the top, the wave that ended yesterday will be the first wave of the third wave and today we will see strong increases.
On the Ichimoku chart without major changes. The pair is above the cloud and the Tenkan and Kijun lines, which does not mean much, especially that they are inversely arranged and the Chikou line balances between the price line. On the H4 chart, it looks better because the pair tested Kijun from the top and now it is located above Tenkan and Kujun creating a signal of three lines. If not for the sentiment, which is still on the short side, I would open a long for the third scenario.
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On pair GBP/USD without major changes. The pair rejected the upper limit of the resistance zone and found itself in the vicinity of the line of the former growth channel. Its defeat should lead to a re-test of the lower limit of the zone, which has now become a support. It’s hard to say what structure we are currently watching, because it may be a third wave and the current correction will be a fourth wave and after its completion, we will see the continuation of the fifth growth wave, which should be extended at similar waves 1 and 3. It can also be a 1212 pattern and that means very strong increases in the near future. In the end, it can be a finishing triangle (and also wave B of an irregular correction). A lot of these possibilities and we must wait for the negation of at least one of them.
On the Ichimoku chart, we can see that all lines are arranged under the heights. The Chikou line moved away from the price to the maximum distance confirming the trend. The cloud begins to expand and grow. It is a pity that there is no opportunity to play in which the sentiment is bothering. Although this one is slowly changing and if there is any correction to the Tenkan line, there may also be a buy opportunity and you can play under one of the scenarios.
