On the Daily chart above, before the close of yesterday’s candle, price broke below the critical support level – the most recent Daily swing low @ 91.24 (that we’ve highlighted using the blue broken line), which we discussed yesterday. Consequently, our day-trade bias remains bearish, and now the medium term bias has followed suit. However, to further confirm the 91.24 level has been decisively broken, we would like to see price move below yesterday’s low @ 90.71 (not highlighted). Price is probably, at the moment, in a bullish retracement on higher time frames i.e. time frame charts higher than the Hourly chart, hence, based on the method discussed on this thread, we might need to exercise patience before seeking Short trade setups on our Hourly charts – supported by the H4 chart.
On the H4 chart above, price broke, at that time, the most recent swing low @ 91.80 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move. However, as discussed on the Daily chart, price, at the moment, seems to be in a bullish retracement and we would like to see price break below a new support level – yesterday’s low as well as the most recent H4 swing low @ 90.71 for us to be more convinced of the bears readiness to push further downward.
The white horizontal line @ 92.65 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 we have a clearer coast, 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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