Since the recent bottom @1.5982 GU has been retracing the first impulsive wave down (the red 1.6744 – 1.5982 formation on D1) – a correction that now threatens to extend all the way up to 1.6440 (wave target) & 1.6560 (78% fib of the above mentioned bear wave on D1, previous daily res. & also 161% extension of what is probably wave B of the current correction (1.6379 – 1.6031). Overall, the view is bearish according to the larger red waves, however the lower time frames don’t give any short signal yet. A resistance is now just tested – so far with failure @1.6320 (78% of the previous down move) – this level is practically the last obstacle before the bulls manage to push the pair to a higher high (above 1.6380), so I’m expecting some resistance here at least until US open today.
H4 is suggesting that we are at a crossroad between a probable extended correction (the a-b-c black wave as shown on my H4 chart) & a bearish scenario valid only if the current 1.6320 resistance remains intact. According to my charts scalps are the only solution for shorts at this time, a more consistant signal being given by a descent below 1.6260 & a close of the London session below that level. Longs @ this time look too late & too risky for me, at least until NY traders confirm the pair is ready to take off. Trix is in bullish mode with MAs aligned for long as well.
On H1 the picture looks clearly bullish, but be careful not to buy a possible top right above 1.63 (doji candle just closed on H1). The long direction is technically correct all the way down to 1.6225, however I advise small stops from now on & rapid profit taking, as the high levels around 78% may give strong bounces – keep your R/R safe. 15min continues to be bullish but M5 looks exhausted.
Personally, im staying aside until I see what’s the reaction to 1.6320-6330. A resistance here until NY open will be a bearish sign for me – will probably start shorting M5 scenarios in US session with the intention to set my highest positions on a possible large down move. Otherwise, if 1.6330 is broken I will look to scalp on the long side after NY open, taking profits fast & not risking more than 30 pips per trade (not willing to risk more before we get out of the H1-H4 range).
Good luck & see you in the room!