On this chart we can see that we are forming a potential bearish rising wedge formation with strong resistance around the 107.9-108.1 zone. Expect to see a break above this level prior to a rejection of the upper structure before pressing to the downside. We have three points of contact on the upper trend line, but only two on the lower trend line. I expect the third touch of lower trend line to be where we see a breakout to the downside.
This idea also links with the DXY looking for a press to the 100-100.50 area prior to seeing a rejection at this level where it could return to the 99/98/97 areas.
As for entries, several points can be considered entry points but this will depend on lower time frame price action at the time. I am considering the resistance zone between 107.9-108.1, the 0 fib level and the upper structure trend line for my entry. Again, all depending on lower time frame price action and rejection of these areas. SL will be placed decently above the structure to prevent getting "wicked out" but whist retaining a strong R:R.
This trade idea will be voided if we see a further bullish press out of this structure to break and close above it with continuation to the upside.
Good luck.
Trade active
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Entered on rejection of the resistance zone which also confluences nicely with the 78.60 fib level on the final swing in the wedge prior to breakdown:
SL also at BE.
Trade closed manually
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Closed at BE:
Comment
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Well done to everyone who didn't move their SL to BE and therefore got the most out of this trade. It is far from over and we are seeing a pull back and retest of the wedge structure which may present a second opportunity to enter this trade setup:
If you look closely, you can see a descending triangle forming in the wedge as well. A bearish divergence is present on the MACD indicator aswell.
JeskoTrading
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@hessheike1967, Well found - it's often patterns within the patterns themselves that add extra confluence to an idea but also timing as to when something could happen in the shorter term.
Nayanmehta025
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Here is the long position .... 200ema indicates long position here and price also support trend line
There is the potential that we could drop out of the wedge before another wave up in the structure. Waiting for confirmation first - I will update this trade idea accordingly.