On the Weekly chart above, since the month of May, series of reversal candle patterns have been forming around the 38.2% fib. retracement level. This is a good sign that supports a possibility of a protracted and sustained downward price movement that might last for months.
On the Daily chart above, the negative MACD divergence is still intact, and still confirming our bias for a downward price move. However, the upward or demand trend-line (the red line) is a critical place to keep close eye on, as well as the daily swing low @ 1.5982 (which we’ve highlighted using the broken blue line): price may find strong support as it moves further down toward these areas.
On the H4 chart above, from a day-trade perspective, we are in a downtrend. Price has broken the most recent swing low @ 1.6153 downward; but as we observed on the Daily chart, let’s keep close eye on the critical support @ 1.5982, which we are also seeing on the H4.Personally, from a day-trade perspective, the coast is clear enough to seek a Short Trade set-up on the hourly, but it’s also not a bad idea to wait for price to break the critical support @ 1.5982 downward before seeking to sell.
Please remember, we always need our hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our short positions. Price pattern on the hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down trend.
Also, PATIENCE is the key here: to sell today, we need to patiently wait for the hourly retracement. It might happen, and it might not.
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