The EURUSD pair has formed an interim resistance at 1.2092 levels and looks to be in an interim downtrend. As depicted here, the pair has unfolded into 5 waves from 1.2092 through 1.1925 levels respectively labelled as (1) or A (not shown). The subsequent corrective rally stalled at fibonacci 0.382 resistance at 1.1990/95 levels, labelled as wave (2). Furthermore, the pair is likely to go into its wave c drop and it should unfold into 5 waves lower towards 1.1800/20 levels going forward. Please note that the pair should be facing formidable resistance around 1.1915/30 levels and is expected to turn lower from there. Immediate resistance is seen at 1.1999 levels while support is at 1.1820/30 levels respectively.
Please remain short and look to add further around 1.1915/30 levels, risk is at 1.2000 levels and a reward/target should be at least at 1.1820 levels.
GBPUSD chart setups:
The GBP/USD has formed a meaningful top around 1.3329 levels yesterday before reversing sharply. The pair is drifting sideways at the moment and should be looking to dip one more time towards 1.3150 levels at least, which is the immediate price support as well. Looking at the present wave count, GBP/USD should be poised to drop towards 1.3150 levels before deciding upon further trend. Please also keep the larger picture discussed last week in mind that GBP/USD has already peaked or should be very close to forming a meaningful top in near term. The previous wave 4 termination was around 1.3400 levels (seen on weekly chart) and 1.3350/60 levels should provide enough resistance. Hence, the upside remains limited and capped below 1.3400 levels.
Remain short with stop above 1.3329 levels, immediate soft target is 1.3130/50 levels.
Please watch out for GBP rate decision to be out in 20 minutes, followed by US CPI data at 08:30 AM EST.
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