Viewing the Euro versus the Australian Dollar on the weekly time frame brings us to one of the most common candlesticks we know as price action traders. A pin bar at the top of a an uptrend that has been ongoing for the past 3 years. Furthermore the pin bar comes after a gap up; knowing that some gaps are usually filled, is this a potential signal of a reversal or a minor retracement before price continues higher?
Price action will guide us to know when and whether we should be waiting for opportunities to short sell the market. Keep in mind that selling at this point is a high risk trade especially with no confirmation candle in sight yet since the trend is an uptrend. Therefore we wait to see whether there’ll be a confirmation candle which can be done on a lower time frame.We monitor this market closely and act when there’s enough evidence and reason to.
During the month of October 2019 we looked at a potential break out of a symmetrical triangle on the weekly chart of the Canadian Dollar versus the Swiss Franc. It turned out that the breakout was a false one and price quickly reversed back into the pattern and went lower, retraced for a few weeks and later broke out below the triangle. Bears have shown great control and dominance in the trend lower as it’s a strong downtrend.
It’s very evident that we’re currently in a downtrend, is it coming to end? Or do sellers still have the power the price push further down? Additional price action will guide us accordingly to know whether we look for opportunities to join the trend in case we missed it or wait to see whether there’s a chance that a trend reversal is on the horizon.
Disclaimer: This analysis is for educational and general information only and not advice or a recommendation to trade or invest. Do your own research/analysis and don’t blindly enter trades based on the analysis.