On the Daily chart above, we concluded yesterday that trading bias was bearish, and our bias still stands. However, by the end of yesterday, we had a signal prompting us to be cautious about seeking Short trades for now: the previous day’s candle closed as a “doji.” A doji candle formation shows traders are currently indecisive about pushing price further downward. Yesterday’s low is @ 1.6249 (not highlighted). To be convinced of the bears’ readiness to push further today, we would like to see price break below this 1.6249 level.
On the H4 chart above, price is yet to break the most recent swing low @ 1.6249 (that we’ve highlighted using the upper blue broken line), which also happens to be the previous day’s low discussed on the Daily chart. This isn’t a good sign supporting a bearish move. Again, as earlier said, “to be convinced of the bears’ readiness to push further today, we would like to see price break below this 1.6249 level.” The white horizontal line @ 1.6394 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. The 1.6119 support level (that we've highlighted using the lower blue broken line), which we’ve been discussing recently as the next area where we should expect a strong support is still valid – in case the bears decide to move today.
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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