The fall started from 1.5904 is corrective in nature and developed as a triple corrective combination which ended with a triangle. It finished at 1.5406 and a new strong rise followed. The possibilities for it are two â€“ impulsive movement for a new high above 1.5904 or corrective movement in wave B (wave A is the 1.5904 â€“ 1.5406 movement) followed by another fall in wave C. Both possibilities are equally possible at the moment but my feeling is that we will not see a new high from current levels but another sell-off. The chart shows that the rise started from 1.5406 is developing in a clearly defined upside channel. This is typical for corrective movements and a fall below the lower trend line would be very bearish signal. Also the current rise already retraced more than 61.8 % of the fall started from 1.5904 (this was the minimum requirement) so there is no problem for a reversal from current levels. This was the reason to give a strategy to exit the long position upon the weekly analysis (opened yesterday at 1.5475). A key support is the lower trendline of the channel shown on the chart so I will enter short in such a case. A key resistance is upper trendline of the channel but I will not enter long in such a case because I can not find relatively close stop loss
Trading strategy: 09:48 EST; 13:48 GMT
Sell on break of 1.5616 (sell stop order at 1.5615), stop loss - 1.5710, target - open
Confidence level â€“ high
This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.