“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.
Recently small changes are observed on EUR/USD. The pair struggles to defend support and is now approaching the resistance zone. Its rejection may lead to another test of the last low, and thus a downward impulse would occur. If it was not an irregular wave C, then we should watch its continuation and fall into the 1.2000 region. If, on the other hand, the pair overcomes the level of resistance, there will be a chance for further increases towards the highs.
If we look at the Ichimoku chart, we will see that the pair successfully defended the Senku Span B line, which is located near the Kijun line from the daily chart. If the pair manages to beat the Kijun line from H4, it will be possible to move towards the falling Senkou Span A. If, however, the pair rejects the currently tested lines, we should see the fifth wave and re-test of the the last low.
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GBP/USD has formed a Fakey formation, which still remains without consequences. The pair fights with support and the bottom limit of Inisde Bar. Their defeating should lead to a 1.3600 test. However, if the pair manages to negate the formation, we should see a movement near the nearest resistance on the basis of wave B, the correction of the last drop.
The point for this will be a re-test of the Senkou Span B line on the H4 chart, i.e. a re-test of the recently defeated Kijun line on the daily chart. After leaving the cloud, the pair from the last high, drawn 3 waves. If the impulse is to be finite, the current corrective motion should be its wave 4. After completion, we should see the fifth wave and the end of the wave sequence from the top.