After the test of this , it sold off very strongly with a large bar and since then, the price has been making lower highs. We can also see that the is very extended (over 261.80% ) and we could see 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 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: http://smartforexlearning.com/trade-advisor/
Find more analysis on http://smartforexlearning.com and give me a follow:
- on Twitter: http://twitter.com/smartfxlearning
- on Facebook: https://www.facebook.com/smartforexlearning
- on Google+: https://plus.google.com/+Smartforexlearning
Good luck trading,