“Search, Analyse, Trade” is a series of analyses for Price Action and Elliott Waves. 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 can be seen here.
EUR/USD continues to struggle with support zone around 1.1700. If the pair is able to reject that level, then we should see an increase to the left arm of the head and shoulders formation. Defeating that level should bring the pair to the next support zone, which is around 1.1600 and then towards the key 1.1480.The sentiment cycle shows a strong increase in long positions and a short reduction. Small players either believe in defending the tested support, or have begun to averagely rank long. I continue to wait for a return to around 1.1830 or breaking support and re-test from below.
GBP/USD yesterday has broken support and is slowly heading to the next, which is around the 1.2950 level. The downward movement accelerated and in principle all the strong growth we saw in September was corrected. Level 1.2930-50 where is the upward trend line is likely to be tested soon. All this decline may be the beginning of wave B of the fourth wave from the monthly chart. I wrote about it in yesterday’s post and I encourage you to see it.
Just like on EUR/USD pair also here we have a very strong increase in long positions, but in this case it is already evident averaging of long positions. For me the trend is obvious and I will be looking for short positions. A good place to do this will be re-test and rejecting yesterday’s support level of 1.3160.
There is not much to write about USD/JPY pair. It is still in Inside Bar on daily chart. Yesterday we had a false strike from Inside Bar, but on H4 chart, and another defense of the demand zone. If the structure that is created on the chart is to be a triangle, then we are in its wave d. Creation of a wave e and a rejection of the level of support will be an opportunity to play at breakout from Inside Bar and continue growth towards 114,300.
Sentiment is constant, it behaves typically for consolidation. Until creation of wave e or breakout thru the top of the Inside Bar, I pause with opening next position.