I've set the RSI
at 60/40 instead of the standard 70/30, by doing so we have a better view of weak price up-strength. As you can see since early 2012 the RSI
failed to move above the 60 level along with low levels of Trix
, see example of EUR/USD
chart posted in commentaries. RSI
failed to move any higher and instead trend line
support was broken and downside began. The last 3 (A)(B)(C) bottom reversals began with RSI
rising above the 40 level and a shorter Trix
bar, there was a fake 40 level break at (A) but that produced a reliable positive divergence reversal signal. Due to the nature of this down move I suspect we will get a “V” shape recovery without divergence just like we had at point (C).
Currently price is just above S1 support, if breaks next likely target is about $40.