Exactly 4 weeks ago in the month of February we covered this pair where there was a descending triangle which was on the brink of a breakout with price at the resistance zone of the pattern. Forex 101 suggests that descending triangle patterns do breakout on the downside. Well just like there are no guarantees in life neither are there any in the Forex market. Price broke out on the upside which was one of the possibilities we discussed 4 weeks ago.
Price did indeed breakout and the uptrend continued at a higher velocity denoted by the steep gradient of the slope. Pay close attention to the market as price is at a major resistance level. Patience is needed as further price action will guide you on whether to follow price after it has either reversed or broken through the resistance level.
After an extended period of a bull market which began 3 years ago, bulls have accelerated the uptrend in recent weeks. During the week that just ended we see a prominent pin bar/shooting star candlestick on the weekly time frame. However zooming in to the daily time frame which is our time frame of choice on this episode of our weekly analysis, we can see a candlestick pattern comprising of a mother candlestick and a set of inside bars. The latter are a potential continuation signal.
It is common knowledge that a pin bar is a potential reversal signal nevertheless we see a different scenario on the daily time frame where we find evidence that the market might be on a small pause before carrying on with higher prices due to the occurrence of inside bars. Price action confirmation is key for either higher or lower prices. This would come after a breakout below the low of the mother candle which would indicate possible lower prices to come and vice versa is true.
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.