“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.
Holiday lethargy on the markets. EUR/USD is still in the resistance zone. It is quite possible that the pair will breach above it creating the fifth wave of the entire last upward movement. As you can see in the chart, the last consolidation resembles a triangle and can be a fourth wave. Rejection of the zone would be implementation of the other two variants with waves 1212 and wave C. In the second case, we should see a test of the last low.
The sentiment fits in the consolidation and remains neutral. Going beyond the resistance zone and its re-test will be an opportunity for going long. However, a strong rejection of the zone will allow us to search for a position at the end of the correction ABC.
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GBP/USD consolidates just above an important support zone. From several candles, the pair is locked in an Inside Bar. The range is getting narrower, which is why we are approaching to decisive move – breaking in one direction. Breaking the top of the IB will allow pair to move towards the line connecting the last highs. Its defeat will open the way to the last high. On the other hand, breaking the bottom line will most likely lead us to test of the trend line.
The sentiment favors shorts. Therefore, breaking down from the IB and overcoming support will be an opportunity for greater declines.
Another pair on which nothing interesting is happening. We have a consolidation just above the internal support line. Its defence should lead to increases towards the key resistance zone. If USD/JPY fails to protect the level, one should expect declines towards level 122.200. The sentiment is bullish, therefore the rejection of the currently tested support zone can be used to search for a long position.
