On the Daily chart above, price closed yesterday forming an “inside candle” formation, which signaled a possible indecision in the direction traders wanted to go. However, early price action today has breached the previous day’s and the penultimate day’s lows @ 1.4604 and 1.4585 (both not highlighted), respectively; that action automatically nullified the significance of the “inside candle” formation. Please NOTE today’s early price action also confirms that the important support level discussed yesterday – the most recent Weekly swing low @ 1.4625 (that we’ve highlighted on the Daily chart using the upper blue broken line) has been clearly broken. Our bias is currently bearish. The next critical support level is another Weekly swing low @ 1.4480 (which we’ve highlighted on the Daily chart using the lower blue broken line). We seem to have enough room to seek Hourly Short trade setups – supported by the H4 chart.
On the H4 chart above, price has broken the most recent swing low @ 1.4585 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The white horizontal line @ 1.4684 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.
No comments:
Post a Comment