Okay firstly, so looking at the , we have a potential pattern forming which will allow the bears to take over the market.
Dropping down to the we can see we broke out of an and currently we are retesting it. If we can close below the counter , we should see downside momentum. Although the candle stick pattern, a followed by a , I do see this pair falling in the long term. The has brought us up to and between the 78.6 and 88.6 Fibonacci levels. There is a minor resistance seen here for 5 candle wicks dating back to the 25th of February.
I will be looking for reversals from this zone between the 78.6/88.6, a 3rd touch of the descending with a strong candle stick pattern indicating price action is . This will then create a discrete lower high followed by a lower low. Dropping down to the 4HR timeframe, we can see a higher high followed by a higher low, then there was a break of structure creating lower lows and lower highs. Thus i am looking for confirmation to short this pair with a great risk to reward ratio.
If no opportunity for a sell is presented for us and the resistance is broken, this short analysis will be invalidated. Which, leads to my next scenario. We see a higher high or a high created followed by a higher low to form an inverse head and shoulder pattern on the 4HR timeframe, allowing us to breach the monthly resistance and go higher.
NB : Risk management is key with indices, especially with each $1 accounting for 10 pips. Trade with risk management and smash the week!
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