This is a look at a technical long term view down to the current position of the U/C.
On the monthly chart we clearly see a DB followed by a higher high in a 5 wave series. Notice wave 2 was sideways and the impulsive characteristics of wave 3 being explosive. Typically a wave 4 follows a defined wave 3 and could be where the U/C is now on a long term basis. I have highlighted a possible scenario for the target should this be a correction as the stoch looks to cycle down as I also highlighted in my post titled “U/C on the Radar.”
If the 50% is the ceiling for now then watch for price to edge lower and lower from here as it could test the 1.2800 level.
With the 21-55 macd below the ‘0’ line look to trade OB stoch cycles on a technical basis for dual time frames of momentum until things change should that occur. If price does retrace from here and respect the 61.8% fib zone and prior support and resistance level at 1.3250-3300 (in white circles) then there would be 2 fib extensions clustered down by the 1.2800 level which could be a near term target zone.
This week could have a W-M2 to W-M4 in play which would support a retracement although a bit shy of 1.3300. Watch for price to rise above the 55 ma and the 21-55 macd to rise above the ‘0’ line for a confirmation. Bulls can trade off OS stoch cycles although today stoch isn’t looking all that tradeable. The M-PP could prove to be a tough level to break as well.
Lets see how it plays.