We are sitting tight with our suggested and explained buying position (entry: 0.6530). As we already emphasized, this pair provides good risk-reward opportunity, with clear daily Doji Candle, and 5th wave ending diagonal confirmation. Do not care about minor pullbacks, as long as your money management is appropriate. Inverted head and shoulder pattern on a daily chart is the third confirmation for our first projected target at 0,67.
Draghi’s speech in Berlin did not make any influence on the market and there are no any major changes to our already projected forecast. The area around 50% Fibonacci retracement or 1.1930, is our targeted region for this long position with the strong reason that 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. The current price action could also face with one more minor pullback below the previous low of 1.1520 and then bounce back up to our projected target.
We did emphasize yesterday that this squeezing price action into the wedge pattern suggest that down move should follow. After nice spike up, and test of the new session high, GBP/USD extended to our projected direction, for the pullback down, before final resume up, as it is already shown on the chart.
Looks like the Monetary Policy Statement this morning and the BOJ’s Kuroda speech was already priced in, and from the technical perspective, we do not see any major changes on our projected direction on USD/JPY. The pair is testing the resistance, and any time soon could start the pullback for the leg e, of the 4th wave triangle. Wait for the confirmation.
The German index tested our projected retracement 0,38% Fibo level, at 12242, and bounced back down. So far we do not see any nice and clear shorter term setup and will need to wait for the confirmation, in any direction, with the clear and impulsive price action.