EUR/USD - Anticipating Bearish Signal After Correction Rally
- 4H: USD/CHF continues to be pressured. After a correction back to 1.06, the market has since in an impulse wave manner. After the 5-waves down, 3-waves up can be anticipated. That gives us a projected Gartley to complete the completion rally towards 1.0440, just below 50% retracement. This is also where the 50-period simple moving average resides. Note the orientation of the moving averages suggest bearish mode, and the widening of the gap suggests continuation.
- The RSI should stay below 60. A negative reversal (higher RSI hi with lower price hi) provides more confidence of further decline.
- You can possibly project the swing from 1.06 to 1.03 onto the next one, or take 61.8% as a conservative projection. 1.010 is the target for 100% projection from 1.0440, and 1.0220 is the 61.8% swing projection.
- The correction rally should really not go above 61.8% retracement or 1.05, or we may have a continuing ranging action, which might still have a bearish bias, but may project to a different target. I will monitor this pair and assess the reward to risk ratio in case this scenario does pan out later today.
Commodity Trading Advisor
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