By Dan Eduard – USD/DKK recently saw a fairly significant bullish correction occur, jumping from 5.7077 to 5.8650 in just over 24 hours. As will be shown through a number of technical indicators, that bullish sentiment may prove to be short-lived as a downward trend may occur in the near future.
We will be using the ForexYard 4-hour chart for USD/DKK in our analysis. In addition to the Slow Stochastic, the current resistance line as well as a Doji candlestick formation will lend support to the hypothesis that the pair could see a bearish reversal in the near future.
1. The current resistance line indicates that the pair may have peaked right around its current level. Traders can take this as a sign that the pair is unlikely to move higher, and could reverse directions.
2. A Doji candlestick formation has occurred, as illustrated by point number 2. Traders can take this as an indication that a trend reversal is likely to take place in the near future.
3. The Stochastic Slow shows a bullish cross has formed above the upper resistance line. This further supports our original theory that a bearish reversal is likely to take place.
Forex Market Analysis provided by Forex Yard.
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