Finally, the EURUSD pair looks to have produced the much awaited counter-trend rally which was expected and required. The rally looks to be counter trend and corrective (3 waves), and has terminated just shy of the support turned resistance trend line as shown here. The wave counts suggests that the entire drop from 1.0906 through 1.0569 has unfolded as an impulse labelled as wave (1), while wave (2) might have terminated around 1.0680 levels. Please also note that wave (2) termination is quite near to previous wave iv of a lesser degree, not labelled here. If the above wave count holds true, we should be looking lower towards 1.03 and parity levels in the weeks to follow. Immediate resistance is seen at 1.0700 levels, while support is seen at 1.0500 levels respectively.
Please remain short for now and also add positions further through 1.0700 levels, stop 1.0906, target is 1.03 and 1.0000.
Gold chart setups:
Gold has pipped us twice with its one sided rally but the wave counts presented above might indicate that the yellow metal has topped out and should produce a meaningful retracement. The wave count suggests that the entire rally from $1,195 through $1,288 levels is coming close to an end now, as depicted here. The move has unfolded into 5 waves, labelled 1 through 5, with wave 5 unfolding as an ending diagonal. If the above wave count holds to be true, the metal should reverse lower from current levels. On the flip side, a push higher would expose upto $1,300 levels, looking less probable for now. To remain on the safe side of the trade, a break below $1,280/83 levels should be considered as an indication of a potential top formation. One can then enter shorts again. Immediate support is seen at $1,283 levels, while potential resistance lies at $1,290/92 levels respectively.
Please look to sell if breaks below $1,283 levels, with stop at $1,292/93 levels, targeting $1240 and $1,230.
Please look out for USD initial jobless claims at 0830 AM EST (low impact), followed by USD U.of Michigan Confidence at 1000 AM EST (High Impact) today.
The material has been provided by InstaForex Company – www.instaforex.com