- Weekly and Daily: Looking at the Weekly, we basically have 2-waves down to the retracement zone between 61.8%-78.6%. The market was supported twice at 1.0200, once last year, and once in January. The market looks strong and ready to take a bullish mode judging from the strochastic breakout as well.
- Looking at the daily, the stochastic is showing strong bullish momentum. A retracement looks unlikely.
- 4H and 1H: The short-term price action confirms the momentum shown in the weekly and daily. Looking at the 4H first, the stochastic is rolling back up before dipping to a bearish zone.
- The 1 H time-frame shows a bearish butterfly and a triangle pattern. If the market breaks above the 1.075 area (127.0% extended retracement and 78.6% retracement), it is possible the market is ready to head to 1.0880-1.090 area as the wave 5 projection.
- The bearish scenario is signaled if the market falls below the triangle pattern. However, look for support from the upsloping trendline in the 4H time-frame before establishing bearish outlook. Even then, be cautious since signs point to a short-term bearish move if there is one, which would point to a truncated 5th wave.
Fan Yang
Currency Analyst
Commodity Trading Advisor
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