In the previous blog on this pair, we were looking at a pullback to complete a potential inverse head and shoulder. Although this was not achieved, once we had the candle closure above the ascending parallel channel, price went on to climb 150 pips to the upside.
On the daily chart above, we had a bullish engulfing candle that confirmed the move to the upside. Once price broke out of the area of consolidation, we had an extended drive into the key level of 124.000 which lines up with previous resistance where price reversed from. Looking at the current daily candle, we can see that price has wicked into the psychological round number of 123.000 which also lines up previous support shown by the lower highlighted region.
On the 4-hour chart above, we can see how the lower highlighted region also acted as resistance while price was consolidating and has now potentially turned into support if this current candle can close above 123.000. If we have a candle closure on or above the middle-highlighted region, we could have a potential inverse head and shoulder along with the rejection of the 61.8 fib level. If price does break lower, we could find support around the 78.6 fib level as well as the ascending parallel channel.
Drop down to the lower time frames to look for entry opportunities and always remember to use the correct risk management. Subscribe to receive blog posts sent directly to your e-mail.