On the Daily chart above, the reversal candle pattern (engulfing candle), observed yesterday around the lower border of a rising wedge chart formation, is still doing a good job of holding our bias in favor of an upward price move. However, price is currently below the previous day high @ 1.4326 (that we’ve highlighted using the blue broken line), which, if we look closely toward the left side of the chart, happens to be around a previous swing high – not an observation we should ignore. These conflicting signs are only warning us to be very careful until the coast is clear.
On the H4 chart above, price broke a recent (not the most recent) swing high @ 1.4246 (which we’ve highlighted using the lower blue broken line) a while ago. However, a new swing high – coincidentally the previous day high @ 1.4326 (which we’ve highlighted using the upper blue broken line) has formed, and price is yet to break above it. While price break above the 1.4246 level strengthens our bias in favor of a continuous upward price move, the new swing high (and previous day high) @ 1.4326 is a major resistance level that we would like to see price break upward. The green horizontal line @ 1.4121 highlights the most recent swing low, and as long as price stays above it – in the absence of any new and higher swing low – our bullish or upward bias remains intact.In all, we are cautiously in favor of an upward price movement today.
However, we still need our Hourly charts – using Fibonacci retracement levels and important support levels – to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today’s up-trend.
Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
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