Looking VERY BEARISH with these signs but will it go up instead?
The current situation:
1. On the 4HR chart, there is a head and shoulders pattern apparent with the neckline at about 1.18 and it seems like price action has already broken through that neckline currently. The measured move is about 1.02, which is also where the daily 200 moving average is and can act as support for the breakdown.
Also, if we zoom out to the daily chart, we can see that the head and shoulders pattern is part of a bigger bearish symmetrical triangle pattern. The measured target of that triangle is now about 0.75
2. Volume: seller volume has been steady and is most apparent on the daily chart. This is not a good sign for a reversal to upward price action as it does not indicate seller strength is weakening.
3. RSI: it is oversold on the hourly, with clear bullish divergence on the 1 and 4HR charts. This could be a catalyst for a reversal on these time frames IF they play out.
The bullish case:
1. Price action does at least need to get back on top of 1.16 and the hourly 21 moving average to make a case to even start looking bullish.
The bearish case:
1. The next level down where there was a bounce was about 1.10, if this level is broken, it will convince me that the symmetrical triangle has been broken. If the daily 200 moving average is also broken with price action start closing below 1, that will be a very bearish sign.
* These are purely my speculations and not financial advice. You should always do your own due diligence before trading or investing.
1. On the 4HR chart, there is a head and shoulders pattern apparent with the neckline at about 1.18 and it seems like price action has already broken through that neckline currently. The measured move is about 1.02, which is also where the daily 200 moving average is and can act as support for the breakdown.
Also, if we zoom out to the daily chart, we can see that the head and shoulders pattern is part of a bigger bearish symmetrical triangle pattern. The measured target of that triangle is now about 0.75
2. Volume: seller volume has been steady and is most apparent on the daily chart. This is not a good sign for a reversal to upward price action as it does not indicate seller strength is weakening.
3. RSI: it is oversold on the hourly, with clear bullish divergence on the 1 and 4HR charts. This could be a catalyst for a reversal on these time frames IF they play out.
The bullish case:
1. Price action does at least need to get back on top of 1.16 and the hourly 21 moving average to make a case to even start looking bullish.
The bearish case:
1. The next level down where there was a bounce was about 1.10, if this level is broken, it will convince me that the symmetrical triangle has been broken. If the daily 200 moving average is also broken with price action start closing below 1, that will be a very bearish sign.
* These are purely my speculations and not financial advice. You should always do your own due diligence before trading or investing.
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