Multiple time frame analysis is involved here. Over on the daily timeframe, you'll see that price is testing the 1.0842 level. This is a high that formed back in November of 2019. Given the sharp move up, I didn't take the initial short, but now I did after this leg down.
Over on the hourly, you can see the strong leg down as prices tested the 1.083 level and then broke through the 1.08305 floor. This entry is timed as price is retesting the 1.08305 level. This level is significant because there was buying volume that originated here, but that's no longer the case.
One concern is the 1.078 level as this is where selling pressure temporarily ceased. However, you'll also notice that buying volume isn't as strong. It took five bars for the price to inch up and this doesn't even cover the entire bearish bar.
Buying pressure currently still remains weak and we can expect further downside potential.
Over on the hourly, you can see the strong leg down as prices tested the 1.083 level and then broke through the 1.08305 floor. This entry is timed as price is retesting the 1.08305 level. This level is significant because there was buying volume that originated here, but that's no longer the case.
One concern is the 1.078 level as this is where selling pressure temporarily ceased. However, you'll also notice that buying volume isn't as strong. It took five bars for the price to inch up and this doesn't even cover the entire bearish bar.
Buying pressure currently still remains weak and we can expect further downside potential.