With price around 1.5960 right now, analyzing the indicators we see that dtosc still has some room to the upside but we are seeing divergence on MACD. As always, we should wait and see what price wants to tell us. Price should test some resistances zones in the up movement first though. The 120sma is still there and we haven't beat the 1.6000 completely so a breakout of this level would suggest a better opportunity.
If we see the daily, basically is the same sentiment than the weekly chart. For me the upside if more favorable right now. Price has been trending up since september and the previous trend line that was broken, is now acting as support. With this chart there is something that just time will tell. If we see the indicators at the bottom of the chart, they are contradicting each other so... what the hell? There is divergence on MACD and the stochastic is in a bullish stream, as I call it, but in overbought zone. Definitely we have to wait and see how price reacts. Price can make a reversal and retest the previous trend line which became support and at the same time we could see a decline in stochastics and a possible opportunity to go long. I've drawn a small timeframe trend line where price is squeezing through. A break to the downside could happen but a break out bar above the 1.6000 would be a confirmation to the bullish sentiment.
I've attached the 4H as well, now with a bit more information. Even though it's horrible how price has been behaving lately (due the trendline breakout discussed in the daily and weekly charts), we can see clearly the main swings. From the A high, we have had a three wave correction downwards towards the point B, then as explained in the weekly chart, my opinion is that price currently is in a wave C which, as expected, should develop in a 5 wave impulsive upward movement. By now, we have a confirmation that the correction abc is complete due wave 1 has taken out the "b" high. Price right now is in its wave 3 or conforming the wave 4.
One observation that I consider important; At point B we can see a complex head and shoulders bottom. Patterns are not my main analysis but I'm starting to value them as a tool.
Two possible scenarios that I'm considering: either price moves forward in the wave 3 trading beyond the 1.6000 and retraces to form wave 4 finding support at the 1.6000 then continues its wave five to the 1.6380/1.6480 zone.
The other scenario would be a retrace right now to form wave 4, and then go for the 1.6380/1.6480 in an extended wave 5. I'm really bullish in this, BUT, I can be death wrong. The important thing here is the technical analysis and money management. We are trying to have the odds in our favor to make a trade with a High probability outcome. And one more thing... Always, always and always you should trade with stops loss orders.
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