General overview for 26/08/2013 10:00 CET
It turns out that the purple wave 5 of the green last impulsive wave 3 was the same in lenght as the purple wave 1, which started this impulsive wave.
After meeting this requirement, the price action started a new corrective cycle to the downside. The first leg of the decline is present (wave (a) green), and it looks like a ZigZag first leg. If this point of view is correct, then wave (b) should not retrace more that 38-50%Fibo and downside correction should resume.
First level to be tested and broken is the 1.0500 area where we are watching confluence of Intraday Support level of 1.0498, Intraday Demand zone at 1.0492-1.0498 and 23%Fibo of the last swing up. If this area is broken, then next level is Weekly Pivot at 1.0475 and then Technical Support and the previous wave 4 the area of 1.04692. The 38%Fibo is very close to this levels of 1.0461.That kind of levels confluence makes this area a very probable target level for correction and trend reversal to the upside.
Support/Resistance:
1.0567 - Swing High
1.0551 - 1.0558 - Intraday Supply
1.0533 - Wave (b) Target Level
1.0501 - 23%Fibo
1.0498 - Technical Support
1.0491 -1.0498 - Intraday Demand Zone
1.0475 - Weekly Pivot
1.0469 - Technical Support | Previous Wave Four Area |
1.0461 - 38%Fibo
1.0396 - 61%Fibo
1.0387 - WS1
Trading recommendations:
Intraday shorts should be in play in this corrective cycle. First level to enter is 1.0533, the second level is 1.0551. SL for both trades is above 1.0567. First TP1 is at 1.0500, the second TP2 is at 1.0475.