A close look at the pair on the daily timeframe reveals a clear ascending price channel that has continued to hold grounds. More significantly, the price channel falls within a long-term uptrend, making it a strong pattern to trade off. From the charts, we find that prices have respected the lower support line of the channel, with prices reversing to the upside for the last 6 months.
The price is currently almost touching the support line of the channel. At this point, we watch for price action reversal patterns such as a bullish pinbar/double bottom/engulfing, both in the daily and the lower timeframe of the 4hr in order to go long. We do not open any position(s) before we have entry confirmation to the upside.
This week we revisit this pair that we covered about two weeks ago in our weekly analysis. Zooming at the daily chart, we find that the clearly cut-out descending price channel has continued to hold grounds, with prices trading within the support and resistance lines of the channel for the last eight months. What makes the current level more significant for us, price action traders, is the fact that it falls within the near-term resistance level.
We stay put, hold our guns, as we wait for reversal price action patterns/candles such as a bearish pinbar/bearish engulfing candle/hammer to inform our bearish bias. Once the pattern(s) forms, coupled with an entry confirmation, we pull the trigger aiming towards the downside.