On the Daily chart above, as anticipated, price continued its movement downward. The upward trend-line (that we’ve highlighted using the red broken line), around which price struggled for days, has been decisively broken downward. A more recent upward trend-line (that we’ve highlighted using the red solid line) is the new area price is attempting to break downward. Also, as observed yesterday, the most recent Daily swing low @ 1.6274 (which we’ve highlighted using the lower blue broken line) is a major support level that we are still waiting for price to break downward to boost our downward bias. In all, current price pattern seems to favor a downward move, but the discussed obstacles to this downward move should not be disregarded.
On the H4 chart above, we have a clearer view of price action around the more recent upward trend-line that we discussed earlier on the Daily chart: we could see the trend-line is already acting as a resistance area on the H4 chart as price’s attempt to break above it was rejected. The swing low @ 1.6418 (that we’ve highlighted using the blue broken line), which price broke below on Monday, has remained the most recent swing low since last week Friday. That automatically sustains our bias in favor of a downward price move. The white horizontal line @ 1.6443 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact. However, we still 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: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
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