General overview for 08/06/2016:
The current wave development can be monitored on long and short time frames and all of them present a great opportunity to trade. Let’s start with the wave development overview at the weekly time frame. We can clearly see the top of the wave 1/A at the level of 0.9800 and then a complex and time consuming downward wave development in a choppy, corrective shape. This corrective pattern had been labeled as waves WXY and it had possibly terminated at the level of 0.6935 in June last year. From that low, a clear five wave impulsive pattern can be distinguished that constitutes wave 1. It stopped at the level of 0.7493, which is now an invalidation level for the overall bullish impulsive progression. On a daily time frame we can see the market had made the wave 4 bottom at the level of 200 DMA at 0.7561 and since then another impulsive wave has developed – wave 1. This wave has topped just below the big supply zone between the levels of 0.7928 – 0.7989, so it still trades inside of the neutral zone. On even a lower time frame, like 4H, the corrective structure to the downside might be finished, but there is still a possibility for a more complex a time-consuming structure will develop if the level of 0.7842 is not clearly violated. Then the market might retrace even deeper towards the level of 0.7694 in order to complete more complex ABC corrective cycle.
Nevertheless, the overall outlook is still slightly bullish in the long term. This assumption is valid as long as the level of 0.6934 is not violated.
Support/Resistance:
0.6934 – Long-Term Swing Low
0.7494 – Green Impulsive Count Invalidation Level
0.7564 – Wave 4 Low
0.7843 – Wave B High
0.7904 – Wave 1 Top
0.7922 – 0.7989 – Supply Zone
Trading recommendations:
Swing traders:
All long term swing BUY orders should be kept open with the SL below the level of 0.6933.
All long term swing SELL orders should be closed if the level of 0.8116 is violated.
Daytraders:
All BUY orders should be still kept open as long as the level of 0.7565 is violated. More BUY orders can be added if the level of 0.7842 is broken*.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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