The Septembers rally finally found some resistance. Where? At the 38.2% fib retrace of the move down on from 1.3940 to 1.2042. Because the market has memory I will look on the chart back in time to see if this price level (1.3150 - 38.2 fib) has some major importance.
First of all we should answer the question what is the trend now on a daily chart? Is it an uptrend or the change of trend still needs to be confirmed?
The uptrend scenario:
Or just a swing with a higher high. So for a change of trend we still need a higher low and another higher high ..
Is 1.3150 a strong SR level on a daily chart?
Beside the obvious low on 4th of October 2011 and three touches of the level pointed out with the arrows I'm giving a score 3 (from a scale from 1 to 5) to this level .. There is still a falling black trend line some 200 pips above from a weekly chart crossing the monthly R3 pivot.
The last daily chart is with the fib study on the last move/swing up.
All three main Fibonacci retracement levels have some importance so should be considered as potential strong support levels on a daily chart!
I lied .. here's another daily chart .. :P
Nice SR zone around this levels now ..
Just one question .. did the price on Friday made a lower high? Now all we need is a lower low for change of trend confirmation! And maybe targeting one of the three fibo retrace levels from the daily chart above?
Look at that beautiful 4h hanging man candle right below the 50% fib retrace! Isn't it?
Firstly let's take a look where the 2 times sudden rally on friday stopped.
The pair is still making lower highs. 50% fib in line with the daily R1 pivot and a SR level from previous days. All pointed out with the arrows.
And now the last 1h chart with all SR levels zones:
The pair has all the potential to hit the 2817 target in the following days! But one step at a time: 2927 to 2937 support zone first .. then some support at 2885.
My wish to all of us is to stay in the right side of the moves and to make some good pips!