Potential 4H short on trend line and local support break
On NZDUSD 4H, we can see a beautiful trendline setup. This chart has been going up for a long time and it's showing a nicely trending price. Recently, however, it has pushed into a resistance area created by a previous swing high. If you scroll left, you can clearly see that the previous price top bounced exactly at this level and then started a long bearish trend.
After the test of this resistance level, it sold off very strongly with a large bearish bar and since then, the price has been making lower highs. We can also see that the bullish trend is very extended (over 261.80% Fibonacci extension) and we could see RSI divergence on the last two swings.
It has all the signs of an impending reversal but I want to see lower lows, though. For this setup to trigger, I want to see a break of the trendline and a break of the 0.732 level. The reason I choose this level is that this previously acted as resistance on the way up and is now a local support, so it's a logical place that I first want to see broken before taking a position.
This setup is part of my Trade Advisor program. With this program, you can learn how to trade these setups, chat with me and can get my full private watchlist every week: smartforexlearning.com/trade-advisor/
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Good luck trading,
Felix
After the test of this resistance level, it sold off very strongly with a large bearish bar and since then, the price has been making lower highs. We can also see that the bullish trend is very extended (over 261.80% Fibonacci extension) and we could see RSI divergence on the last two swings.
It has all the signs of an impending reversal but I want to see lower lows, though. For this setup to trigger, I want to see a break of the trendline and a break of the 0.732 level. The reason I choose this level is that this previously acted as resistance on the way up and is now a local support, so it's a logical place that I first want to see broken before taking a position.
This setup is part of my Trade Advisor program. With this program, you can learn how to trade these setups, chat with me and can get my full private watchlist every week: smartforexlearning.com/trade-advisor/
Find more analysis on smartforexlearning.com and give me a follow:
- on Twitter: twitter.com/smartfxlearning
- on Facebook: www.facebook.com/smartforexlearning
- on Google+: plus.google.com/+Smartforexlearning
Good luck trading,
Felix