“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 has rejected a very important resistance zone last week. A Pin Bar was created, which results in the current decline. From a wave point of view, the growth impulse that came after defending support is unfinished. To finish it we need a fifth wave. The pair reached the inner support zone and 61.8 percent of the third wave. From this level it is possible to complete the fourth wave, which would be a straight correction and a move towards the top. The current drop may also be the right arm of the inverted head and shoulders formation. Finishing such a formation would lead to test high from the early September.
GBP/USD remains inside an Inside Bar from the weekly chart. The market draws on the chart an abc structure again and is moving towards the upper limit of consolidation. The structure slowly starts to look like a triangle, and if it really is, it’s only in its wave c. If the pair reaches the border supply zone and will reject it, there will be a chance to play short.
Finally, there was a move on USD/JPY. The pair currently implements the formation of the H&S that was formed on the H4 chart. Last week we had a return to the neck line and her rejection. As a result, we see the declines that have reached an important support zone. The downward wave is strong so we should see at least one more test and only then if it will be rejected in the direction of the defeated support. Such movement may be the right arm of a larger head and shoulders formation. Its implementation can push price to 109,100.
The partner of “Search, Analyse, Trade” series is a Dukascopy Europe broker who gives its customers access to ECN accounts in different currencies.
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