This week, we are going to look at the most liquid currency pair. Right away looking left, it’s clear price has been trending strongly bullish. Bulls got exhausted at the top and bears took over and have been successful driving the market bearish. Price has been consolidating in the form of a falling wedge in this bear dominated stage of the market. In addition to that, a few weeks ago, we were trading within an ascending channel. The market broke below the ascending channel and pushed upwards to the lower boundary of the channel for a retest. At the same time we have a level that has acted both as support and resistance. Ladies and gentlemen this is what we call a trading confluence or an A plus setup. Trading confluences are explained in detail in our course, but briefly they are described as when we have more than one occurrence happening at the same time giving us a high probability that something will happen. In this case we have 3 occurrences. Currently price has been resisted by the upper boundary of the falling wedge. The retest on the ascending channel has held at least for this week as price has not been to return to the channel. Finally the level has also held its own and acted as resistance.
Following the resistance of the various patterns on price, we have a bearish bias. However waiting for a confirmation is paramount to opening any sell positions. Since we are well aware that price might as well, rally bullish and break out of the wedge, pierce through the level and return back to the channel.