On the Daily chart above, we would notice that the longer term bearish trend is pretty much obvious, and it’s even more noticeable on the Weekly and Monthly charts. Satisfyingly, from a day trade perspective, our bias is leaning toward the longer term trend: price pattern has been forming lower highs. However, the lower lows haven’t been as distinct as the bears seem to be struggling to break decisively below the support area around the most recent Daily swing low @ 89.29 (which we’ve highlighted using the blue broken line). Price action between the minor downward or bearish trend-line (the red dashed line) and the 89.29 level seems to be forming a “descending triangle” formation. A descending triangle formation gives us an idea that traders are currently indecisive whether to push further downward or not. As a result, though our bias, from a day-trade perspective, is bearish, we would like to see price break below (or, preferably, close below) the 89.29 level to be further convinced of the bears’ strength.
On the H4 chart above, late last week, price broke below the most recent swing low @ 89.63 (which we’ve highlighted using the upper blue broken line). That automatically shifted our bias in favor of a downward price move. However, to buttress our observation on the Daily chart, we would notice price is struggling to close decisively below the most recent swing low: after the initial breach of the 89.63 level, subsequent candles’ opens and closes are seen to be “clinging” to the level. The 89.29 level (which we’ve highlighted using the lower blue broken line) – as well as the bearish trend-line – discussed on the Daily chart is also seen on the H4 chart, and it gives us a clearer view of price’s proximity to the level. Again, though our bias, from a day-trade perspective, is bearish, we would like to see price break below this 89.29 level to be further convinced of the bears’ strength.
The white horizontal line @ 90.60 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, once the coast is clear, we’ll 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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