This currency pair is trading in the narrow flat 128.87-130.32 for the third consecutive day. The breakout of the flat will show the direction of the future medium term trend. However, according to wave count, the price is moving within impulse wave C of the midterm trend - colored magenta in the chart. Within this wave C there's a set of A-B subwaves (colored red), with wave B developing.
The targets of the corrective subwave B are Fibonacci retracements of 127.96-130.32 and 126.43-130.32.
Supports:
- 128.86-83 = confluence area of .618 and .382 retracements (the price reversed within 1 point!)
- 128.38 = .50 ret
- 127.92 = .618 ret
If the midterm continues the nearest resistances will be the retracements of 130.32-128.87, 135.03-126.43, and expansions off 126.43-129.58-127.96, 127.96-130.32-128.87, and 128.87-129.65-128.95.
Resistances:
- 129.60 = .50 ret
- 129.73-77 = confluence area of objective point (OP) and .618 ret
- 130.21 = expanded objective point (XOP)
- 130.33 = contracted objective point (COP)
- 130.73 = .50 ret
- 131.11-23 = confluence area of two objective points (OP)
Overbought/Oversold
The Detrended Oscillator is flattening around the zero level, which confirms the tight consolidation. However, assuming that the prevailing trend is up it's preferable to consider only long positions when price hits a Fibonacci support (listed above).
Read more on how to apply Fibonacci studies to calculate price targets.
