As I study pairs I like to look at all possibilities in the market and look at confluences in the market for probably trade set ups. As we know, as retail traders, we don't move the markets. We simply go along for the ride. We can study market structure, price action and key levels to formulate possible ideas. Given this, I will say that this idea is for demonstration and study purposes only. It does not constitute a signal, but simply an idea to study. A few key points I would like to point out:
1. On this chart we see a very nice trendline, which has served as both dynamic support (since prior to 2014 to 2017). 2. We see price broke through the trendline, retested the trendline, and served as dynamic resistance (two touches). 3. We can draw a parallel trendline and use the Fibonacci tool to see the golden ratio of 61.8% is an area of confluence, and could possibly serve as a point for price to make a bull run to higher prices. 4. If this is followed, price would be contained within an ascending parallel channel.
What I will be doing is watching price action to study how price responds to key levels in the market. We must always watch price action and be ready to analyze previous perspectives against what price is doing. Traders should never get caught up on what we want price to do, but we must watch what it IS doing.
Please like and follow this trade for updates. You will also see that I have posted other trade ideas for this pair with updates as well, noting my observations as time has passed. If you have ideas about this analysis, please also share them in the comments as well.
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Watching this spinning top on the daily. Spinning top is indicative of a reversal. Look also at trendline.
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To clarify; it's important to see how the daily candle closes. I was watching for price to hit the 61.8 fib level but it doesn't necessarily have to right now.
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The spinning top noted above was indicative in this case of price reversal, and boy did it!! I hope you are enjoying your profits!