Sunday, April 15, 2012
The pair dropped further this week, although it failed to reach 38.2% level at 127.27 as I suggested on my previous post. The good news is I believe that the correction phase is not over yet. The 23.6% level at 129.64, which acted as resistance this week remain unbroken on daily time frame, despite of several movements above it on Monday and Tuesday. In fact, the week low was created not long after it went back below 127.27.
Now it will be very disturbing for me if I don't see the pair reach at least the 50% level, especially after that firm looking bearish candle on Friday. I have checked the outlook for USDJPY and GBPUSD hoping for confirmation. While there is still a rising trendline below GBPUSD current price, the other pair closed just below 38.2% level on daily time frame. Or the way I see it, a break of that level on weekly candle. So there is the confirmation I needed and I'm going to look to place short trades as early as possible.