Thursday, August 21, 2014

Bearish Momentum Could drag Gbpyen to the South

I have been watching this pair for some time now and I think there is something interesting emerging. 

With proper trend analysis, one could say this pair is on the downward trend on the daily chart. The recent bullish push could end soon for the bearish trend to resume.

Going by my normal wave and pattern recognition , I see a possible end of wave 4 to resume wave 5 downward.

The recent upward push is as a result of an ending diagonal/wedge pattern which is now at the sub-wave 4 of W-3. There is also a strong resistance (172.40-172.60) that could hold price against further push up to the W-1 region.

I will wait for a good bearish engulfing bar to sell at the resistance zone mentioned above with my stop loss at 173.00 ( where W-1 will be altered). My final target- Support zone ( 169.50).

On the other hand, if price pierce the resistance zone mentioned and move in the region of W1 I will withdraw the sell order. If price broke the resiatance trendline upward, we could see a deep bullish correction or even reversal.
I will watch as price tell me what next to do.

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