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Bearish momentum developing

19 October 2016, EUR/USD

Bearish momentum developing

Wave Analysis

As anticipated, the corrective wave (b) could not go higher than the short term resistance level $1.1055. Instead, it rebounded from this level and even broke below 1.1004, following the close below $1.1004, we expect a possible bearish count towards the support level $1.0822 or even lower. The current downward rally is the unfolding of the impulsive wave (c) and may end up below $1.0822. This view can only be invalidated in case the pair end up breaking above 1.1055. Expect a similar wave count in GBP/USD and EUR/AUD. These pairs have a strong positive correlation of up to +71% and will have a similar price action during this intraday.

Trade Recommendations:

Remain short with an ideal target at 1.0822.

Graham Osano
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