Wave count shows that this currency pair is now moving within potential corrective wave A to the med term downtrend - colored magenta on the chart. The targets of the corrective wave are Fibonacci retracements of 137.75-132.43 and of 134.80-132.43:
- 134.24 = .764 retracement
- 134.46 = .382 ret
- 135.09 = .50 ret
- 135.72 = .618 ret
In case the price breaks through 132.43 we'll have an extension. And the targets of the downside movement will be Fibonacci expansions off 134.80-132.43-134.08 and 134.03-132.65-133.37:
- 131.99 = objective point (OP)
- 131.66 = OP
- 131.14 = expanded objective point (XOP)
- 130.20 = XOP
Overbought/Oversold
The Detrended Oscillator is in the oversold area. The nearest overbought area lies within 50 to 70 pips above the current price. Assuming that the prevailing trend is still down, it's good to seek for topping signals in the oversold area stated above to enter short.