- The pair is in bullish correction
- A bearish trend line has been working as resistance
- The pair may get choppy on intraday charts
- Traders are to wait for the price to produce trading signal from value areas
EUR/USD a Bearish Trend Line is in Play
The pair has been bearish on the H4 chart for the last five weeks. The H4 chart shows that the price has been obeying a bearish trend line. Since the pair trades below the trend line, thus, the sellers may look to go short in the pair from value areas. The H4 chart also shows that the price has enough space to travel towards the North to find its resistance near the trend line. Thus, the H4 traders may have to wait for the price to produce a bearish reversal pattern near the trend line. Simple Moving Average 30 seems to be working as support. However, price action suggests that the breakout has not produced enough momentum. The buyers are not that interested to buy the pair as of writing. It shows the significance of the bearish trend line.
The H1 Chart Trapped within a Channel
Since the H4 chart is having a bullish correction, the H1 chart does not look that bullish. The H1 chart trades within a channel. After having its first rejection, it found its support and made a decent bullish move followed by another bearish move. It had its second bounce and made a longer bullish move. However, it had its second rejection at the resistance of the channel. As of writing, the price is heading towards the resistance again. A bullish breakout may push the price towards the North. On the other hand, a bearish reversal pattern may drive the price towards the channel’s support again. Traders are to be very patient in such price action.
The H4 chart is bearish-neutral. Unless, the price makes a bullish breakout at the trend line, the Bear may come any time and show its dominance. The H1 chart price action has been bullish-neutral. Intraday traders may look to go long but must maintain lucrative risk-reward.
Written by: Md Tareq Sikder, Senior Analyst Forex Prop News
Contact and follow Tareq on Twitter: @tareqfpn