After an uptrend who last for 3 weeks, the pair clearly broke down the support of 0.9662 during the last session. As mentioned, it is not recommended to enter any transaction immediately after a breakdown; it may be safer waiting for a small correction and then go “Short” (in our case) along with the trend.
As a result, a confirmation of the new trend is required through the identification of a decreasing configuration on 1H graph, unless the pair, during the correction process, would break back the Support of 0.9662. If it does, the previous opportunity is not relevant any more.
Actually, in order to catch the opportunity to go “Short”, the identification of a decreasing configuration on 1H is needed to confirm such an opportunity.
The required configuration should appear with the breakdown of the 1H support on 0.9567. In this case, a transaction may be ordered.
– “Limit” order on “Short” position 10 pips below the mentioned 1h Support, which is: 0.9557
– “Stop Loss” order on the last peak appeared: 0.9610
– 1st degree to place the “Take Profit”: 0.9524
After several weeks of sideways movement without any specific trend, a new uptrend started. Please notice the presence of a very important resistance on the daily graph situated around 1.0069.
Once that resistance will be reached, there are two possible outcomes resulting:
- The collapse of the resistance followed by a closing above that level. In this case, it would be safer waiting for a small technical correction to occur and after the previous trend will be restored, going “Long” with the trend, after the identification of an increasing configuration on 1H graph. Since, for the last weeks, an important support was created, our intuition is that this outcome is the most likely to occur.
- Stop on the resistance, with test or without. In this case, waiting for the end of a “resting period” of at least a session and a half, to confirm the implementation on that resistance would minimize the risk. Then, waiting for the rebound to occur and going “Short” along with the new trend, until the closest support.
Have a nice day
Real forex team