Mikoxl.
Short

The temporary relief of bear pressure has come to an end

FX:EURGBP   Euro Fx/British Pound
41 1 1
Reading daily price action
There was a significant selloff at the end of the 3rd bullish candlestick. The bears even pushed the price lower than the previous bullish candlestick. On that same day the bulls tried to regain control, but were unable to close at the opening of that day. This resulted in a hanging man. The day after on friday the 20th of March the bulls tried to invalidate this selloff, but were eventually kicked back to 0.7225.

Reading price action with the 4H candlestick
The most recent structure (formed in the beginning of March) was broken so I was looking for a retest of structure at 0.7267. With a double bottom and the 0.618 retracement I had more reason to believe that a bearish bat at 0.7267 could actually initiate the next selloff. And so while the daily hanging man was forming, I saw a hidden bearish divergence with the RSI on the 4 hour chart.

Putting these readings into perspective
An initial test of the monthly range zone has taken place which resulted in a (temporary) relief of bear pressure (B). On the monthly chart this relief is beginning to look like a large pinbar. However, the overall trend is still bearish and we have not violated the prior daily lower high at X. The bears initiated a strong sell-off just below X which resulted in a hanging man at C. The day after on friday the bulls could not invalidate the hanging man. I turned the technical indicators off, but the RSI is not showing any sign of divergence yet and the Bollinger bands shows that the last two candlesticks had taken place at the mid of the band. I expect the bears will push the price lower to at least the most recent lows at 0.7013. But an AB=CD with an completion at the zone of 0.6669-0.6564 is also a possibility.
Mikoxl. PRO
2 years ago
hanging man invalid
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