General overview for 23/08/2013 12:00 CET:
After series of bearish structures invalidation I have taken a look from another perspective and re-labeled the old count.
According to this count the price is still in complex and time consuming corrective cycle. This structure is either wave X brown or a part of a triangle wave alt.4. As long as there is no breakout above 133.76, we can not assume that triangle wave 4 is over. Nevertheless, there is a first clue that a triangle might be finished and recent price development is first wave of a new impulsive wave to the upside.
There are two main possibilities here on Daily chart, marked with blue and brown arrows:
SCENARIO 1: MAIN COUNT - BLUE ARROWS - This is the count I have been following and the reason for taking so many short positions:there is a missing impulsive wave (Y) brown to the downside that would end the (W)(X)(Y) Irregular Flat Wave 2 correction.
SCENARIO 2: ALTERNATE COUNT - BROWN ARROWS - This labeling indicates the possibility of unfinished wave alt.4 black of a larger cycle impulsive wave 1 purple: the pattern unfolding in wave alt.4 balk is very common ABCDE Triangle pattern. This triangle might be finished now and this is why on lower time frames I have added wave alt.1 green labeling. The final confirmation of a finished triangle comes with a break out of the Key Level multi-month SUPPLY AREA and new high above 133.76. Then, the target for this last wave 5 black is a min. 139.16 level.
Currently on lower time frames like H4, we can see that price is currently consolidating in the area of upper green triangle line. The break of this line will expose 132.77 level to be tested: price must close above this area to invalidate the Key Level resistance ( that will act as a support now). Then further price progression towards 133.76 area is anticipated.
132.51 - 132.76 - Key Level | WR2 | Target for wave C |
132.25 - Green Triangle Line Support
131.90 - Technical Support | Wave four area of lower degree |
131.56 - WR1
131.24 - Previous wave four area of a lesser degree
131.00 - Technical Support
129.76 - Weekly Pivot
First entry should be intraday long positions (buy stop 131.36) with SL below 131.90 and TP at 131.51 - 131.76 area.
Then the Key level area of 131.51 - 131.76 should provide good resistance and intraday short positions should be in play from this level with SL just above 131.77 anf potential TP1 at 131.30 and TP2 131.90
The material has been provided by InstaForex Company - www.instaforex.com