I pointed out last month how the Bullish Channel we’d seen since Dec 2017 was coming to an end plus:
It looks after all that whichever of 0.8160 or 0.7817 (recent 50% Fib) gets taken out first will likely determine the direction.
Despite some earlier false starts it seems yesterday’s final two consecutive closes below the 0.7817 level has settled the issue as yesterday we also had a close below the combination of the very strong Medium MA (currently 0.7772) and the Long MA (currently 0.7787). Closes below these last two are important and we look set to have a new lower consecutive close again today.
Interestingly today we have also breached the May – Sep 2017 50% Fib support (currently 0.7730) plus the support from the Lower Tine of the May – Dec 2017 Andrews Pitchfork (currently 0.7733). Closes below these would also be significant. So where next...well, the short term question is whether the action over late Jan-to-date is in fact a Bearish Halfway Hesitation…possibly a Bear Flag?
That can be a reasonable interpretation and would suggest a potential Target around 0.7650…marked by an ‘X’ on the Daily Chart above. The second question is longer term…is the whole action from May 2017-to-date a form of Double Top?
It seems reasonable at this time, especially if we start fulfilling the Bearish HH/Flag Target… but one to watch. Topside…well, you’d need consecutive closes over the Dec 2017 – Jan 2018 50% Fib at 0.7816 to even talk about neutralising the move lower…seems unlikely at this time.
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