I was expecting some resistance at 1.5400 due it is a round number but then, Bam! a price gap over the weekend, so I needed to wait and see. Gaps are not so common on forex as in the stock market, as I've read, moreover not that big. I assume that the downward movement occur due stop-loss orders taken by brokers or even a natural market's response to close that gap. Price continued its upward movement with a little resistance @1.5400 and continued higher to 1.5500 without any major hold as I expected. The swing high was @1.5523, just 18pips shy from my next target @1.5541 (1.27 fib ext), then price drop sharply. Another gap in the way suggesting prudence.
I was bullish and expecting that price could reach 1.5626/41 but last swings changed my mind. From april 15th high @1.5523, price retraced to 1.5200 zone (monday 19th low @1.5191) and bounced up to thursday 22nd high @1.5473. Because price couln't break the previous high of 1.5523, more than likely we will see a decline in price. Right now it seems that price is ranging again. I drew a resistance line with the highs as the upper channel limit, but I'm hesitating about the lower limit. From my previous post, the support line seems to still be valid but time would tell. We may see price bouncing between this two limits and a break either way could mean a big movement.
Because I'm bearish, my expectation is that price could test once again the upper limit near 1.5440 and drop to the 1.5101/15 zone as first target with a little struggling at 1.5200, then, due there is not any major support levels, price should test the march 25th low @1.4798 showing some trouble around round numbers 1.5000 1.4900 and 1.4800.
Almost in every post I say this... nothing is for sure. Price could continue to go higher but if we analize the daily chart below, I've mark some elliot wave counts. This is when a conflict between analysis appear. Whislt in the weekly chart a bullish gartley seems to be present, with elliot waves theory, we might be in a major impulsive downward wave three and right now in its wave five. So price should go as low as 1.45s so... what to believe in. It's relatively easy to stablish elliot waves once they have occur, but I'm not sure that should be considered as a reliable way of trading. If price breaks the march 1st low of 1.4781, this minor wave 5 should be completed and price should go in a major corrective three-wave fourth and, if october 13th low is not broken through, price should go as low as 1.40s or lower. This is way too much speculation and cannot be confirmed till it actually happens, so... what to believe?
I could be death wrong in this post, though. Make your own analysis!.
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