GBP/USD intraday technical levels and trading recommendations for October 3, 2014

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Overview:


On July 15, extensive bearish impulse was initiated. Since then, the GBP/USD pair has been downtrending below the depicted downtrend line.


Two bearish impulses were previously initiated around 1.7180 and 1.6630 corresponding to the downtrend line.


The price level of 1.6140 constituted a prominent weekly support to meet the pair. Bullish rejection was witnessed in the previous visit. This led to bullish weekly closure ( above the weekly support level around 1.6250 ).


Retracement towards the price zone of 1.6350-1.6400 took place as expected where a new bearish impulse was applied as expected in previous articles.


This price zone corresponds to the upper limit of the depicted channels as well as Fibonacci level of the recent bearish impulse between 1.7180 and 1.6060.


The GBP/USD pair remains targeting at 1.6050 ( the recent weekly low ) then 1.6000 ( psychological support level ) as long as the market is trading below 1.6240 on a daily basis.


Trading recommendations:


Based on the previous data, the market offered a valid SELL opportunity around 1.6460 during last week's consolidations.


This short position remains valid as long as the bears keep defending price zone of 1.6250-1.6320 ( 23.6% Fibonacci level and previous broken bottom ). Hence, Stop Loss should be lowered to 1.6150 and let the remaining portion of the position run with the market.


Bearish targets are located around 1.6160, 1.6080 ( both were reached ) then 1.5890 ( significant weekly level ).


The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/NZD for October 3 - 2014

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Today's support and resistance levels:


R3: 1.6152


R2: 1.6120


R1: 1.6082


Current spot: 1.6059


S1: 1.6040


S2: 1.6012


S3: 1.5978


Technical summary:


We have seen a perfect test of the broken base-channel resistance-line at 1.5978 and this former resistance now support has protected the downside perfectly. We will now be looking for a break above 1.6120 as the first strong indication, that the correction from 1.6446 is over, but a break above 1.6242 is needed to confirm the bottom and the next rally higher towards 1.6446 on the way towards 1.6836. The risk is a break below 1.5978, that would call for a decline to the support-line near 1.5890 before higher.


Trading recommendation:


The material has been provided by InstaForex Company - www.instaforex.com