On the technical side, it has been trading in a on the 4H timeframe for the last 38 days, testing both the upper and lower twice. The price is currently on its way to the lower again, where it might provide an opportunity to buy a low (provided the channel would hold). We also have a pattern edging toward completion. Price has already passed the B point and progressed 95% from C to the potential reversal zone (PRZ) and the is approaching an oversold value.
When defining the PRZ for a , we look at the projection of three levels. I: the of XA, II: an AB = CD pattern and III: a BC expansion converging in the same area (in this case 1618 BC ). This defines a tight zone, 25 pips wide, represented by the orange lines in the chart. This zone converges nicely with a daily structure level from 2009 . We also have the lower channel going straight through this zone, increasing the odds on a reversal. Should price action test the PRZ and reverse convincingly, I would enter long. SL goes 10 pips behind X. TP1 = of AD and TP2 = of AD.
There are 132 pips to be made (if this pair follows the script) and the trade has a reward – risk ratio of 2.0!