EURUSD Weekend Review

Daily Chart:

Quite clearly, the green daily MyWave is still bearish, and although a swing up seems to have begun on Friday, the RSi study is not showing any divergence into that low, usually found in terminal 5th waves. As such, I'll expect to play both sides of a corrective wave, shorting into strength and following the lower highs up on the 4hr chart. The momentum study in the first sub-chart suggests there is some time to go to relieve the oversold status and somewhere close to the pink Displaced MA would be a suitable target for a continuation downhill. I expect the 1.34518 to be the first area of resistance and then into MyWave above. Anything that penetrates the MyWave and the DMA would suggest something more bullish is on the cards.

4hr Chart:

The 4hr MyWave is also bearish for now and I anticipate a corrective swing continually reaching back into the MyWave to pick up lower highs and cashing out on higher highs. The 4hr DMA sits at that 1.34518 zone, so expect price to reach up to or over it and then either fall under it or over it, but fall nevertheless in response to it. This is likely to be a 'b' wave affair and could be steep to retest the low, even take it out if an expanded flat occurs. For now 1.33792 looks a good target to bank shorts and move long again, but all short term trades if this move up does prove corrective. When the momentum study reaches the green target zone in the sub-chart, I am looking for 3 waves to have occurred on the 4hr chart for a chance of the correction being over, but not a concern for now. Next week looks bullish albeit into a bearish wave.

60min Chart:

The regression channel from the 1.3649 high has been broken to the upside and price is also now above the weekly 50% retracement zone. The momentum study and RSi suggest we are in wave 4 of the 'c' leg in possibly 'A' up and I expect price to make a new high on Friday's action and then move either downhill or sidewards to test the hourly DMA. I think a test of the regression channel perimeter at about 1.3390 looks possible but depends on how long the new high takes, as this will move price action to the right and make the weekly 50% band more likely nearer 1.3410. I'd like to see 3 waves down on the hourly momentum to lose my shorts, so a pop and drop Monday/Tuesday would be perfect. If this wave up is to be corrective, there should be plenty of choppy price action, especially in the pull backs as they will be corrections within a correction.

So in summary, the bigger picture still holds bearish but a move up on the 4hr chart is likely playable in both directions as a retracement. The absence of positive divergence on any of these 3 timeframes suggests there will be more downside in due course, so anticipate lower highs to be tested over and over as the market find its feet into any move uphill. Anything different from this wave personality and I'll have to rethink next week's trading strategy.