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„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.

EUR/USD

The pair, following the weekend gap up, came back to last week’s Inside Bar. It is still attempting to defend the inner support line and the demand zone. If the candlestick currently being formed is a demand one, it will confirm a return to the IB and a Fakey formation. This will make us think of a correction to the upper limit of the formation. Another fall to the bottom will negate this scenario and will confirm a test of the 1,1600 level, which should occur still this week.

On the weekly Ichimoku chart, the pair reached the Senkou Span A and is trying to defend that line. If the rebound we are currently watching is continued, its first target should be the Tenkan line from the daily chart. With advantageous sentiment, following a rejection of the line, we can look for positions with a continuation of declines to the 1.160 level in mind.

GBP/USD

On the GBP/USD pair we can see continuation of wave 5, which stopped on the support line. It is quite possible that we will observe an attempt at building a correction, which should be wave 4 of wave 5. After its completion, I am expecting declines towards the inner support line. If the line is defended, the falling sequence should be considered as completed. Based on that scenario, wave 1A will form, which should lead to stronger moves up as part of wave 2B. However, the issue with this scenario is that all the waves being developed are of a similar length and it can’t be excluded that wave 5 is extended, which should lead to declines towards the 1,3150 level.

On the weekly chart of GBP/USD, we are slowly approaching the Senkou Span A line. Assuming that we complete wave 5 of wave 5, this line should be the target for any moves down. On the H4 chart we can clearly see that we are in wave 3 of wave 5. If a bounce occurs as part of wave 4, it should reach the Kijun line and will give an opportunity to look for positions to trade wave 5.

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JPY/USD

The pair made a positive reaction to the support and we have been witnessing attempts to move up since that moment. An Inside Bar was formed and a break out if it should point to the directions for the sessions to come. The current rise is building the right arm of a hypothetical H&S formation. In such a case, any falls from the top can be marked as wave 1A, and the current correction as wave 2B.

On the Ichimoku chart, we can see that the pair reached the Kijun line and is trying to defend it. If the moves up taking place now are to be considered as wave 2B, a test of the Tenkan line will be an ideal target for its completion. If the line is rejected, we could trade wave 3C.

Translation: Mirosław Wilk

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