The longer term uptrend that has been in place with this pair since March of this year is now looking to continue.
As the daily chart shows; price is now looking to test a crucial daily resistance level.
Whilst price is in an overall trend higher, in the shorter term we have a bearish 1,2,3 reversal pattern that has formed to the downside.
That is where this...
Since March of this year this pair has been in a roaring trend higher.
However, in recent weeks price has been attempting to make a reversal with a 1,2,3 pattern on the daily chart.
The level price is now pushing back into looks crucial for this pair.
For any potential reversal lower this level will need to hold as a price flip resistance.
If we can see that...
Price on this pair is in the last stages of attempting to form a 1,2,3 reversal pattern.
After forming the lower high, price is now looking to test the daily chart support level.
If this level breaks and the 1,2,3 pattern gets confirmed, then all the momentum would be lower.
This would open the way for a lot of potential short trading opportunities.
Long positions can be taken:
- 123 trend change confirmed above 621.60
- Strong RSI
- Above 200 periods moving average
Enter above 668 or let the price touch the trendline first and then look for a bullish candle.
in my trading I also watch some currency pairs and a very nice opportunity came up on FX:GBPJPY .
In March we could see a rejection at a very strong support and since then a 1-2-3 pattern developed on the weekly chart. This is actually a textbook example of this pattern. Take a look :-)
- at a strong support
- edge of the value area
the strong red bar that broken the wedge a few days ago signaled the start of 1-2-3 pattern
at point 3 today, it will be an strong engulfing pattern
it is also a false breakout of 1) horizontal resistance, 2) a long-term downward trendline and 3) 50 SMA
I have three indices in mind: NASDAQ > SP500 > HSI, and HSI is always the weakest candidate for short
the broken ascending trendline signled the start of 1-2-3 pattern
enfulfing candlestick at point 3 confirming the strong reversal
the enfulfing pattern also false breaks a major resistance
the 4th times 50 SMA was broken, this time seems real
I don't have much experience or confidence trading this sort of pattern 1-2-3. So not going to be taking a trade, but wish to note it down as part of my back and forward testing of this pattern to see if it offers any edge.
Decided to publish in case if anyone out there is interested in this sort of pattern.