„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 has recently breached the demand zone it tested lately and stopped on the inner line of the support zone. We can observe an attempt to bounce off and retest the breached zone. The last wave down is 5 and if it doesn’t constitute completion of wave 3, further decline towards the 1.1730 level should be expected. However, if wave 3 has been completed, the pair should start forming wave 4, which means that a stronger rebound and a retest of the 1.1930 may be take place.

On the H4 Ichomiku chart we can see that the last wave down is 5 with an “addition”. This may mean an irregular correction. If so, the pair should head towards the Tenkan line from the daily chart, where the support zone that was las breached is located. Wave 5 up should develop as part of wave c. If the pair breaches the Tenkan line from H4, such a move will be probable, especially considering the fact that the pair moved away considerably from the Kijun line. The last wave down is made of a constant increase of long and closing of short positions. Since yesterday we have reached an equilibrium, which allows us to look for any positions. If the above-mentioned rebound towards the Tenkan line takes place and is rejected, it will be possible to look for shorts as continuation of moves down.

GBP/USD

We have seen no decisive moves on GBP/USD. The pair is forming a corrective structure around the lower limit of the support zone. It looks like an expanding triangle and once the price breaks out if it, the direction for the sessions to come should be shown. This structure should be wave 4 of the whole sequence running from the very top. If so, there is more likelihood that we will break down out of it and declines towards the 1,3300 level will follow.

On the Ichimoku chart, we can observe a sequence of lines typical of a sideways move. The Chikou line is within the price. The Tenkan and Kijun lines are moving flat and the price keeps piercing them every now and then. At present, the Tenkan line from the daily chart is located right over the price chart. If rejected, it will mean bouncing off Senkou Span A and should trigger a move down. Since sentiment has been neutral for a long time, one may try to trade wave 5.

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USD/JPY

The pair breached the resistance zone that it tested 2 days ago and moved towards the 111.000 level that is being tested now. These moves up look very symmetric when analysed starting from the bottom. Wave 1 and 3 are equal, which may mean that the present one may be extended. If so, the zone being texted now should be breached, with the pair moving toward the top.

On the Ichimoku chart, the pair, having tested the Tenkan line from the daily chart and broken out of the cloud, keeps rising. At present, the pair is sitting at the level of the Kijun line from the weekly chart acting as support. Since the pair has been moving away significantly from Tenkan, that level may give rise to a correction. From the wave perspective, we can also see that the last sub-wave is 5, so the whole sequence up may be already completed.

Translation: Mirosław Wilk

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