The previous uptrend took the form of a 1-5 impulse wave pattern, as postulated by the Elliott Wave Theory. It was terminated at the major resistance level at 1.22400. Subsequently, the price action started developing the current downtrend.
It takes the form of a descending channel and behaves as per the expectations of the Elliott Wave Theory. The price action just finished establishing the second retracement leg (4-5) near the upper boundary of the channel, which would clear the way for the establishment of the final impulse leg (4-5).
Moreover, the latest reversal also occurred from the 23.6 per cent Fibonacci retracement level and the 100-day MA (in blue), which represents a major bearish confirmation.
If the price manages to break down below the 38.2 per cent Fibonacci and the 20-day MA (in red), it would then be able to target the 61.8 per cent Fibonacci. The latter serves as the upper end of a major swing low (point 2 of the uptrend).
It takes the form of a descending channel and behaves as per the expectations of the Elliott Wave Theory. The price action just finished establishing the second retracement leg (4-5) near the upper boundary of the channel, which would clear the way for the establishment of the final impulse leg (4-5).
Moreover, the latest reversal also occurred from the 23.6 per cent Fibonacci retracement level and the 100-day MA (in blue), which represents a major bearish confirmation.
If the price manages to break down below the 38.2 per cent Fibonacci and the 20-day MA (in red), it would then be able to target the 61.8 per cent Fibonacci. The latter serves as the upper end of a major swing low (point 2 of the uptrend).
