A parallel channel highlights the angle of the trend present in the current market on a 30 minute timeframe. The channel is DESCENDING. A descending channel is a bear trend. A break of the channel indicates bullish momentum. With momentum increasing we can expect a pullback against the trend. We may now begin to look for an entry in the direction of the trend. Most of the time such a chance is provided near a fibonacci retracement level. The 38,2%, 50% and 61,8% are all widely used.
The 5 point fibonacci tool (XABCD) shows confluence with 38.2%, 61.8% and 161.8% fibonacci ratios within the pattern.
A resistance level is found just above the completion point of the pattern. By using the 3 point fibonacci tool, the 1.414 level plotted on the chart shows a 141.40% extension of AB projected from C. The 1.414 level is used for alternate ab=cd patterns. The 1.414 AB=CD is converging with a 61.8% retracement, confluenced by a 161.8% extension.
A diagonal red line is used to highlight and illustrates hidden bearish divergence (RSI indicator is showing higher highs, while price is forming lower highs!)
A break below the blue trendline indicates a shift in the momentum.
If the resistance level is broken (cluster), another opportunity to sell short this market may occur around these levels:
Please like the chart if you find the analysis valuable!
Good luck to all trading EUR/USD!
The 5 point fibonacci tool (XABCD) shows confluence with 38.2%, 61.8% and 161.8% fibonacci ratios within the pattern.
A resistance level is found just above the completion point of the pattern. By using the 3 point fibonacci tool, the 1.414 level plotted on the chart shows a 141.40% extension of AB projected from C. The 1.414 level is used for alternate ab=cd patterns. The 1.414 AB=CD is converging with a 61.8% retracement, confluenced by a 161.8% extension.
A diagonal red line is used to highlight and illustrates hidden bearish divergence (RSI indicator is showing higher highs, while price is forming lower highs!)
A break below the blue trendline indicates a shift in the momentum.
If the resistance level is broken (cluster), another opportunity to sell short this market may occur around these levels:
Please like the chart if you find the analysis valuable!
Good luck to all trading EUR/USD!
