With this kind of clear ending diagonal on the last 5th wave and daily Doji candle confirmation, retrace up was highly anticipated, as you can see in our previous analysis we suggested buying NZD/USD at 0.6530, with the stop below the previous low and the target of at least 300 pips. On H1 chart the pair very precisely has drawn 5 legs up, and it retraced to Fibo 0.38% level, which is also very usual for the second wave retrace. The direction is UP, but alternatively, we could see some flat correction again to our entry point around 0.6835, which can bring us one more opportunity to add to the buying position. In any case, we do suggest to sit tight with this long position, stay patient, and wait for solid profit.
The index does not show a very clear picture. It is drawing more complex pattern a double tree, and it’s very tricky, but in any case, this recently retraces up, should come in at least 3 legs up. So we will track the scenario of an ABC pullback up like it is shown on the chart. Cautious required.
Obviously, GBP/USD rebounding up. The only thing that we should calculate is our projection for this retrace ending. We do believe that current retrace could be labelled as wave 2, so we will expect to be done anywhere from 0,38% Fibonacci retracement. Our current projection, as it is shown on the chart is short-term long, and long-term short, so the pair brings opportunity for any tastes, wheater you are a long or short-term trader.
Obviously, this is a weekly chart, and this is a long-term perspective. Currently, we are tracking the triangle, which is very usual for the 4th Elliott wave. Price action in this wave often tends to range, without a clear trend move. As you can see on the chart we have perfectly labelled a,b,c,d leg and we now expect pull back down for e leg, which will represent finish of the 4th wave, and we should expect resume of an uptrend for the wave 5 up.
As we already highlighted we are tracking pullback leg 3 or C from the zigzag A-B-C pattern after 5 waves down were completed all the way down from the 24.January high in EUR/USD. The area around 50% Fibonacci retracement or 1.1930, is our targeted region for this long position. The reason behind it is that wave A and wave C tend towards equality in length, and that retracement for the pullback of the second wave usually comes to 0,50 to 0,618% Fibo levels. But, this pullback down, may not be done yet, and before we test our projected profit target of 1,1930, we may see pullback down below 1,1520.