Possible head and shoulder formation? | 24 February 2017

Wave Analysis:

For the past few days, the US Dollar has been making lower lowers and is still pretty much bearish both on the daily and the 4 hour chart. From the current chart structure and set up, this is a possible slanted head and shoulder formation. With the diagonal trend line being the neckline, we are waiting for the current corrective inner wave (iv) to end around 113.10 to sell the impulsive wave (v) towards 111.80. This pair should be traded alongside USDCHF, CADJPY and NZDJPY. These pairs have a strong positive correlation of up +72% and will have a similar price action during this intraday. Only buy or sell US Dollar if the other pairs are giving the same signal.

Trade Recommendation:

Wait for a clear close below 112.61 to go short with an ideal target at 111.80.