This currency pair has developed 3 waves of daily degree - colored light green in the chart - and now is developing corrective wave 4. This wave on smaller timeframes consists of A-B-C subwaves with subwave C still developing - colored yellow in the chart. The targets of the downmove are Fibonacci retracements of wave 3 0.9833-1.0255, subwave C within wave 3 0.9990-1.0255, and expansions off subwaves A-B within wave 4 1.0255-1.0172-1.0210.
Supports:
- 1.0053 = .764 retracement
- 1.0044 = .50 ret
- 0.9994-93 = confluence area of .618 ret and super expanded objective point (SXOP)
If the price reverses up the nearest resistances will be Fibonacci retracements of the wave down from 1.0255 - this wave is not developed yet.
Overbought/Oversold
Assuming that medium term trend is down, it's preferable to use overbought readings of the Detrended Oscillator or its cross above the zero level to consider short positions. The price is now far below the zero level and oversold, therefore now is not a proper moment to consider shorts. New short positions can be reinstated on recovery to the zero level which is 40-50 pips above the current price - 1.0110-20.
Read more on how to apply Fibonacci studies to calculate price targets.
