According to wave count this currency pair is developing a corrective wave to med term downside impulse 0.9221-0.8861. On smaller timeframes the pair is beginning a downwave, which has the potential to become subwave A of the impulse C (A and B colored magenta on the chart). The targets of the downside movement are Fibonacci expansions off 0.9221-0.8861-0.9078 and retracements of 0.8861-0.9078:
- 0.8970 = .50 retracement
- 0.8944 = .618 retracement
- 0.8856 = contracted objective point (COP)
In case the price reverses to the upside the nearest target is still:
- 0.9083 = .618 retracement of the downside movement from 0.9221-0.8861.
Overbought/Oversold
The Detrended Oscillator is greatly oversold. Assuming that the med term trend is down, it's good to look for topping signals around the oversold area, which according to the indicator is some 40-60 pips above the current price.
