If you have been following us since the beginning of this month, you would be as amazed and thrilled to see the wave counts work exactly as been represented here. Today was yet another day of the EUR/USD counter trend which we discussed yesterday and it has reacted again at the convergence of the trend line resistance, Fibonacci 0.618 mark and past support turned into resistance around 1.1820/30 levels. The recommended longs should have been exited already and shorts are coming into play again. According to the wave counts, EUR/USD has produced the wave (1) (5 waves down) and the wave (2) (A-B-C counter-trend rally) till this moment and is now turning lower into the wave (3), which is again expected to sub-divide into 5 waves. In accordance with the long term bearish view, we have been capturing short-term waves on the hourly chart and shall continue to do so here.
Short from 1.1820 levels now, stop at 1.1910, target is open for now.
GBPUSD chart setups:
The GBP/USD pair is still falling in line with our expectations but has just made one more low to complete its 5 waves impulse structure, and this was counted in as a probability. Now, the pair should be setting up to continue its counter trend rally higher towards 1.3060 at least and probably towards 1.3130 levels as well. Please note that the pair was drifting sideways into a triangle wave structure during last 2 trading days. Normally the triangle structures produce a thrust break out towards the existing trend and then turn sharply. If you observe today’s movement, GBP/USD dropped lower into 1.2933 levels and pulled back sharply, producing a pin bar candlestick pattern. The immediate support should be at 1.2933 levels, while resistance is at 1.3060 levels for now.
Remain long now with an upside target of 1.3060 and 1.3130 levels, with stop below 1.2933 levels. Timeframe is few days.
There are no events left for the rest of the day.
The material has been provided by InstaForex Company – www.instaforex.com
Source: Forex Review