“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 continues declines initiated by the rejection of a very important resistance zone. Currently the pair is in the vicinity of local support. However, the target for downward movement should be the upper limit of the downward channel or support zone around 1.16860. If the price falls into these areas it will set the right arm of the hypothetical, reversed head and shoulders formation.
GBP/USD has reached a very important resistance zone and initially rejected it again. It seems that we will see another attack and if the pair can not break through it again, we will see movement towards the trend line and lower consolidation limit. Overcoming the resistance will negate the variant with the continuation of drops in the wave 3C and will return to the uptrend.
The sentiment remains neutral, so if an appropriate formation of rejection of the tested level appears, short positions can be considered. The currently tested zone is also the upper limit of IB from the weekly chart. One more unsuccessful attack on the level will create a Fakey formation.
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USD/JPY surprised me a bit. The last wave of declines was strong enough that I was expecting one more approach to reach the support zone and only then move towards the closest resistance. However, the pair reacted to the line running through the last lows. A bullish candle can continue its upward trend towards 112,800. Rejection of this level can result in a movement towards the neckline of a hypothetical H&S formation. If the pair actually reaches that zone, and this is very possible because the wave that formed from the bottom is a fifth, then there will be a chance to trade on the base of H&S formation. Defeating the level negates this variant.
