04 January 2017, EUR/USD
Wave Analysis:
Yesterday, the pair traded massively short and is still pretty much bearish despite the bullish engulfing candle witnessed yesterday on the 4H chart, at 16:00. The current chart set up shows signs of a possible head and shoulder formation; with the level 1.05933 being the head, we expect 1.0488 to be the shoulder and that we should continue short upon a clear breakout below 1.03836. Thus, instead of going long, we choose to sit on the sidelines and wait for a clear breakout below 1.03836 then go short. The anticipated downward rally should be the continuation of the impulsive wave (c) and should not go 1.03395. Expect a similar wave count in GBPUSD and NZDUSD. These pairs will have a similar price action during this intraday.
Trade Recommendations:
Remain flat for now and wait for a clear breakout below 1.03836 then go short with the first target at 1.03395. Buy positions are only recommended upon a clear rebound from 1.03950-1.03836
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