On the 4-hour chart, the development of the downward correction of the higher level as a wave 2 of (5) has ended. Now the formation of the third wave 3 of (5) has begun, within it the entering momentum of the lower level i of 3 has formed, and the development of the downward correction ii of 3 is ending. If the assumption is correct, the pair will grow to the levels of 1.2685–1.2920. The level of 1.2420 is critical for this scenario.
Main scenario
Long positions will become relevant after the rebound from the level of 1.2420 with the targets at 1.2685–1.2920.
Alternative scenario
The breakdown and the consolidation of the price below the level of 1.2420 will let the pair go down to the level of 1.2255.
Trade
Scenario
Timeframe Weekly Recommendation BUY LIMIT Entry Point 1.2420 Take Profit 1.2685, 1.2920 Stop Loss 1.2330 Key Levels 1.2255, 1.2420, 1.2685, 1.2920
Alternative scenario
Recommendation SELL STOP Entry Point 1.2410 Take Profit 1.2255 Stop Loss 1.2470 Key Levels 1.2255, 1.2420, 1.2685, 1.2920