Here I have zoomed in on the weekly chart to highlight the price action from the lower swing point (fractal) to the higher swing point. As I mentioned in my last published idea on this currency pair, a downtrend will continue until it is interrupted by a higher low. Looking at the chart, I have identified a higher low. However, let me further say that although the downtrend has been interrupted doesn't mean that it won't continue at a later date.
While a downtrend is identified by a series of lower lows and lower highs, an upward trend is identified as a series of higher lows and higher highs. The last upward movement looks like it could be the beginning of an upward trend, but allow me to get down into the details here. A correction to a downward trend can also be an upward price movement that forms a higher low and a higher high. But wait a minute, you say! An upward trend is also identified by a series of higher lows and higher highs. The difference is in the details. A single higher low and a higher high is not a series of higher lows and higher highs. To be considered, a new upward trend has started is that there needs to be at least one more set of a higher low and a higher high to be considered a series of higher lows and higher highs. As a result, the current upward price movement consisting of just one set of a higher low and a higher high can be a correction to the downward trend. Another detail as to why the current upward price action is most likely a corrective move is on the monthly chart I identified this currency pair was heading down to the lower major support trend line. Still, there is one more detail I haven't revealed yet, and that analyzing each of the candles in the upward correction to learn what they are telling me about the upward price action. Are the candles telling me the upward price action is simply a correction, or is it in the early stage of developing into an upward trend? Only the candles know until they are revealed! Sounds like a novel to me :) with a cliff hanger! Well that is what analysis is, it's the story of the currency pair.
While a downtrend is identified by a series of lower lows and lower highs, an upward trend is identified as a series of higher lows and higher highs. The last upward movement looks like it could be the beginning of an upward trend, but allow me to get down into the details here. A correction to a downward trend can also be an upward price movement that forms a higher low and a higher high. But wait a minute, you say! An upward trend is also identified by a series of higher lows and higher highs. The difference is in the details. A single higher low and a higher high is not a series of higher lows and higher highs. To be considered, a new upward trend has started is that there needs to be at least one more set of a higher low and a higher high to be considered a series of higher lows and higher highs. As a result, the current upward price movement consisting of just one set of a higher low and a higher high can be a correction to the downward trend. Another detail as to why the current upward price action is most likely a corrective move is on the monthly chart I identified this currency pair was heading down to the lower major support trend line. Still, there is one more detail I haven't revealed yet, and that analyzing each of the candles in the upward correction to learn what they are telling me about the upward price action. Are the candles telling me the upward price action is simply a correction, or is it in the early stage of developing into an upward trend? Only the candles know until they are revealed! Sounds like a novel to me :) with a cliff hanger! Well that is what analysis is, it's the story of the currency pair.