„Searching, Analysing, Trading” is a series of analyses designed for an investment strategy based on Price Action and Elliott Waves. Its step-by-step description can be found in this link. We kindly invite you to follow our today’s review of selected currency pairs and potential opportunities for transactions.
Our analyses are prepared based on Ducascopy’s SWFX Sentiment Index, available here.
Not much PA has been happening on EUR/USD. It keeps fighting for the support zone and a rebound, which should take place as part of wave 4 of wave 3C. It the pair succeeds in defending the current levels, the target for a possible correction should be around the 1.1920 level – coinciding with the support it has breached recently. If the price pierces through the level 1.1850 straight away, we should observe a decline towards 1.1750 and only there a major correction could develop, being this time wave 4 of the whole falling move counted from the very top.
No changes have occurred on the Ichimoku chart, either and so far it’s hard to spot any possibilities to join the trend. In terms of wave sequences, as mentioned above, a possible correction should be wave 4 of wave 3C. And if such a rebound takes place, we should observe a move towards the Kijun line on H4 TF, where, assuming that sentiment is neutral, we could look for a short entry and trade wave 5.
For several days the pair has been sitting around the lower limit of the support zone and the trend line. Three candlesticks of indecision have developed, which have formed an expanding triangle of sorts. If we consider a decline from the wave perspective, this formation should be wave 4 of the entire downward move and once completed, we will see declines towards the 1.3300 level. As wave 2 is usually short-lived, wave 4 may be extend a little in time and be complex.
On the Ichimoku chart we are observing a sequence characteristic of a sideways move. The price has broken the Kijun line and right now we are witnessing its retest from above. A move towards the Tenkan line from the daily chart and its retest will be quite possible. The Chikou line is entering the price, which confirms a corrective tendency. Considering the current sentiment, which is neutral, if the price approaches Tenkan and Senkou Span A and those levels are rejected, we will have an opportunity to trade wave 5.
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The scenario involving wave 2B in a simple correction that I presented recently has failed. The pair continues moving up and wave 5 down that we have seen recently turned out to be wave c of an irregular correction. At present, the pair has reached a resistance and if it is broken, a test of the 110.300 level should take place. Another obstacle is located in the area of the 111.500 level. Currently, the advance we are observing should be wave 5 of wave 3, so a possible rejection of the 110.300 level may trigger a correction as part of wave 4.
We have a buying signal on the Ichimoku chart. The pair surged up above Senkou Span A. The Kijun and Tenkan lines have formed a cross and Chikou moved above the price. However, it should be remembered that the current levels are Kijun and Senkou Span B on the weekly chart and it is them that are holding the price. Only once they have been broken and retested from above, an ideal occasion to look for positions will arise.
Translation: Mirosław Wilk