With the test of 133.81 yesterday, we have seen the end of wave 5 and wave I of the entire rally since the July 2 2012 low at 94.10. We are now entering a major correction as wave II, it should ideally correct to the bottom of wave 4 which comes in at 118.73, which (if you take a look at the chart above) will be an almost a perfect 38.2% correction of the rally from 94.10 to 133.81. The rally from 94.10 to 133.81 has taken 44 weeks (Fibonacci number) and has corrected slightly more than 50% of the decline from 168.88 down to 94.10.
In the short term, we have already seen a 50% retracement of the decline from 133.81-131.94 with the test of 132.87 and should expect the next decline to at least 131.08 any time now. That said we must accept the possibility, that support at 131.94 protects the downside for a slightly higher correction to 133.10, but that is not our preferred count at this point.
Trading recommendation:
We missed our take profit + reversal target at 134.20 with only 39 small pips, but we knew it was a close call. Our breakeven stop was hit at 132.30 and we will now be looking for EUR selling opportunities. We will sell EUR at 132.40 or upon a break below 131.94. We will place our stop at 133.94.
The material has been provided by InstaForex Company – www.instaforex.com
WEEKLY
8 HOURLY
Today’s support and resistance levels:
R3: 133.10
R2: 132.88
R1: 132.66
Current spot: 132.24
S1: 131.95
S2: 131.55
S3: 130.95
Technical overview:
With the test of 133.81 yesterday, we have seen the end of wave 5 and wave I of the entire rally since the July 2 2012 low at 94.10. We are now entering a major correction as wave II, it should ideally correct to the bottom of wave 4 which comes in at 118.73, which (if you take a look at the chart above) will be an almost a perfect 38.2% correction of the rally from 94.10 to 133.81. The rally from 94.10 to 133.81 has taken 44 weeks (Fibonacci number) and has corrected slightly more than 50% of the decline from 168.88 down to 94.10.
In the short term, we have already seen a 50% retracement of the decline from 133.81-131.94 with the test of 132.87 and should expect the next decline to at least 131.08 any time now. That said we must accept the possibility, that support at 131.94 protects the downside for a slightly higher correction to 133.10, but that is not our preferred count at this point.
Trading recommendation:
We missed our take profit + reversal target at 134.20 with only 39 small pips, but we knew it was a close call. Our breakeven stop was hit at 132.30 and we will now be looking for EUR selling opportunities. We will sell EUR at 132.40 or upon a break below 131.94. We will place our stop at 133.94.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: