Wave count on hourly timeframe shows that this currency pair might be developing potential A wave (colored magenga) of the greater downward cycle ABC - colored light green on the chart. The strategic targets of the downside movement are Fibonacci expansions off 137.75-128.77-133.59 and 133.59-130.63-130.94:
- 129.11 = contracted objective point (COP)
- 128.04-127.98 = confluence area of COP and objective point (OP)
- 126.15 = expanded objective point (XOP)
- 124.61 = OP (off daily waves AB - light green)
The pair has retraced from .50 retracement point of 137.75-128.77 (see the chart).
In case the price turns up for a correction the targets of the upside movement will be Fibonacci retracements of the downwave starting from 133.59.
Overbought/Oversold
The Detrended Oscillator is in the oversold area. The nearest overbought area is 60-80 pips above the current price. Assuming that the prevailing trend turning down, it's advisable to seek for topping signals against the overbought area or Fibonacci resistances to enter short.
