Last week, FCPO price penetrated the (2186 - 2250) area and closed in to the next weekly demand zone (2089 - 2132) in a decisive manner; a clear manifestation of wave iii. FCPO is expected to respond to this area early this week for a technical rebound (wave iv) and should be moving upwards in a corrective fashion. The acceleration channel (so does the Fibonacci retracement level on the right side of the chart) will be updated accordingly to reflect the termination point of wave iii.
The maximum retracement of wave iv should be bound by the base channel. Should wave iv is gradually developing into a triangle or flat correction rather than a quick zig-zag, the base channel will likely converge into a few important zones as follow
1. previous low structure (2238 - 2250),
2. supply area (2237 - 2250) and
3. gap zone (2245 - 2259).
giving the perfect confluence area for us to take a short position.
Price movement that crosses the invalidation level (2316) may signify the market has hit rock bottom and the major trend reversal has already begun.
The maximum retracement of wave iv should be bound by the base channel. Should wave iv is gradually developing into a triangle or flat correction rather than a quick zig-zag, the base channel will likely converge into a few important zones as follow
1. previous low structure (2238 - 2250),
2. supply area (2237 - 2250) and
3. gap zone (2245 - 2259).
giving the perfect confluence area for us to take a short position.
Price movement that crosses the invalidation level (2316) may signify the market has hit rock bottom and the major trend reversal has already begun.