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Bearish engulfing candle

29 November 2016, GBP/USD

Wave Analysis:

Yesterday, the cable opened at 1.2483, went as high as 1.2530 and as low as 1.2384 but and ended up closing at 1.2415. The previous day's candle is a perfect bearish engulfing candle along a key level 1.2493; this is a clear indication that sellers could be coming into the market. However, unless there's a clear breakout below the lower trend line, chances of rebounding from this trend line are equally high, if this is the case, then we expect to continue long with the motive wave E towards 1.2743and possibly higher. A clear breakout below the lower trend line will culminate into a possible bearish price movements towards 1.20291. Expect a similar wave count in EUR/USD and GBP/HKD. These pairs will have a similar price action during this intraday.

Trade Recommendations:

Expect a possible rebound from the lower trend line to go long with an ideal target at 1.2743. Any clear breakout below the lower trend line will call for short positions with an ideal target at 1.2029.

Graham Osano
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