On the Daily chart above, price currently seems to be in an upward retracement – in a strong downtrend: we could observe a number of reversal candle formations at the lower edge of the downward or bearish channel. Also, yesterday’s candle closed as a bullish candle. Consequently, current price action supports our bullish bias. We expect price to continue its upward retracement toward the upper edge of the downward channel. However, from a day-trade perspective, we would prefer to see price break above yesterday’s high @ 1.0374 before we are fully convinced to seek a Long trade setup.
On the H4 chart above, we currently have a higher high and higher low formation: a good sign supporting a bullish bias. However, price is yet to break above the most recent swing high – also yesterday’s high – @ 1.0374 (which we've highlighted using the blue broken line). The 1.0374 level, from a day-trade perspective, is a critical resistance level that we would prefer to see broken upward before we seek Long trade setups on the Hourly chart. The green horizontal line @ 1.0276 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. 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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