Wave count on hourly timeframe shows that this currency pair is develping subwave C (colored yellow) within wave B (colored red) of a larger degree. However the break of 0.8772 will indicate that the downwave is actually an impulse.
The targets of the downside movement are Fibonacci expansions off 0.9221-0.8772-0.9032 and 0.9032-0.8912-0.8957 and retracements of 0.8314-0.9221:
- 0.8883 = contracted objective point (COP), reached already
- 0.8837 = objective point (OP)
- 0.8768-63-55 = confluence area of .50 retracement, expanded objective point (XOP) and COP
- 0.8660-43 = confluence area of .618 ret and super expanded objective point (SXOP)
In case the price resumes its upside movement the nearest resistances will be Fibonacci retracements of the downwave starting from 0.9030.
Overbought/Oversold
The Detrended Oscillator is in the oversold area. Assuming that the major trend might be turning down it's advisable to stand aside now and seek for topping signals when the price gets into the overbought area some 60-80 pips above the current level.
