Potential Bullish Signal: Why I'm Watching the 0.875 Level?

In the Daily charts, we've now retraced 100% of our last leg up . You can see right below the starting point of the leg up, we have a Weekly Demand/Buy zone beginning around the 0.875 level. Bulls might find this an enticing target for market entry, on a bullish signal.

This area could potentially be a 'STOP HUNT' zone. As we all know how retail traders often set their stops under swing lows, as taught in many trading books.

My buy strategy involves seeking buy signals as we approach the 0.875 level. There might be a brief plunge to this level, followed by a sharp upward move.

This is a short term trade idea , my target will be aiming for the 0.90 area with a stop loss set below 0.863. I will be looking for bullish signals on the lower timeframes using my TRFX indicator.

I hope you find this analysis helpful. Happy trading!

Trade active:

As mentioned we got the quick drop towards 0.875 and the bullish signal appeared after the drop on the 1hr and 4hr chart giving the signal to enter.

Stop and target are mentioned in the post I will be taking profit off the table and moving the stop loss as the position progresses :)

Comment:

Have closed 50% of position and moved stop loss to breakeven trade moving nicely towards 0.90