Based on higher timeframes, especially the daily chart I analysed that this pair could be seeing a third bearish lower high in this current trend. Using the Fibonacci Retracement price action came and rejected with strong wicks from the 61.8% level on three consecutive days. This along with the resistance found at the 0.78800 key level gave me higher timeframe confidence of a continued bearish trend.
On the H4 timeframe the counter trend line provides me with an short entry point on the break. Economic news produced a strong bearish candle and the entry came afterwards. Based on the previous two H4 candlesticks the stop loss was kept smaller at 40.5 pips compared to a 191 pip take profit target. This gives me a healthy 4.72/1 Risk Reward for this trade.
If price action does indeed move to bearish towards out target, a new lower low for this 43 day bearish trend will be seen at 0.75125. This level may see some support but an expected break seen afterwards. As for the target level of 0.76500, this will be a very important bullish setup on all higher timeframes - Monthly, Weekly and Daily because of the ascending trend line. A bullish trend reversal trade will most likely be taken at that level.
On the H4 timeframe the counter trend line provides me with an short entry point on the break. Economic news produced a strong bearish candle and the entry came afterwards. Based on the previous two H4 candlesticks the stop loss was kept smaller at 40.5 pips compared to a 191 pip take profit target. This gives me a healthy 4.72/1 Risk Reward for this trade.
If price action does indeed move to bearish towards out target, a new lower low for this 43 day bearish trend will be seen at 0.75125. This level may see some support but an expected break seen afterwards. As for the target level of 0.76500, this will be a very important bullish setup on all higher timeframes - Monthly, Weekly and Daily because of the ascending trend line. A bullish trend reversal trade will most likely be taken at that level.