USDSGD has just confirmed a on the 4-hour timeframe with a 0B retracement of 0.886.
The potential reversal zone (PRZ) is comprised of 2 ratios:
1.618 AB projection at 1.36041
0.886 0B retracement at 1.35979
Stop loss is set at the 1.13 0B projection, or 1.36327.
Take profit is set at two levels, management and final.
The management level is the 0.50 BC retracement, or 1.35347.
The final level is the 0.886 BC retracement, or 1.34859.
Overall risk to reward ratio for this trade is 4.1.
The terminal price bar has also formed, confirming all three ratios, and an formation has formed in the PRZ on the 4-hour, acting as a confluence for a potential reversal.
Looking at major timeframe analysis, the 1-day timeframe shows a strong resistance key level formed since the 22nd of January at approximately 1.36130. The PRZ forms at this level, serving as a further confluence of a possible reversal.
has also reached heavily overbought territory on the 4-hour timeframe at the terminal price bar.
In terms of fundamentals, the retail sales report will be coming out later today, and this is something that we need to keep our eyes on as it is a high impact news release. We are looking for a failure to meet the expected 0.4% (Investing.com) in order to go along with our short position. I am overall on this report, as I believe that the trade war with China is something that should take effect on retail sales, with potentially higher costs of production of goods as a result of the tariffs placed on both sides. This lowered supply due to higher costs of production will then lead to an overall lower quantity demanded on these goods sold by retail stores.
As always, observe further price action to ensure whether or not a reversal may happen before entering a trade, and for this trade, make sure you are following retail sales too!
Thanks for reading,
Take profit was reached a few hours ago!
Thanks for reading everyone and good job for everyone that took the trade with me!