A channel has formed on this pair on the weekly timeframe
. The channel is bullish
and right now that seems to be the sentiment, but price has not completely broken major resistance around the 0.80594 zone. Within the channel support has been re-tested 3 times and may return. Right now we are at a level of strong resistance within the channel. There is a possible formation of a head and shoulders
pattern, which confirms bearish
movement in the next few weeks. My target profit level is around the 0.76420 area. My theory is that price will break the previous low, come back up to the bottom channel trendline
to re-test it now as resistance and then continue the overall downtrend. On the other hand, price could bounce again on the trendline
and eventually break to the upside. However, I do believe that we are still in a very bearish
market. This pair has been in a nice bullish channel
or consolidation from the previous downward spiral since October 2015. It appears that the pair is changing trend, but I do not believe that it is safe to say just yet due to such a strong presence of resistance. My advice would be to trade within the channel, play it safe, and exit your trade once price approaches the boarders while being mindful of reversals or pull-backs. Bearish
divergence is a confirmation that this pair will drop soon. Buyers are being faked out and the continuation of the downtrend will more than likely resume. My stop loss is placed at 0.80746 and My TP level is around 0.77780. My entry is at 0.79995. My overall outlook on this pair is a sell for the swing. Happy trading!!
Disclosure: *Trading is not for everyone and losses could easily exceed investment capital. Use proper risk management and smaller lot sizes to protect individual accounts.