Good Friday morning, traders. Price wicked up to a high of $6736.50 yesterday and has continued to fall since then. I am still not seeing any conviction in further price appreciation. It is currently sitting on the bottom of the ascending channel it has been trading in. Any further downward movement below this channel can see this pair continuing to fall rather than bounce. This was my concern during last night's stream when I noted that price was moving within a flag but that the candle structure within it was not looking good. But the channel is not validated yet as there is no second bounce off what is believed to be the bottom of it, so even price falling a bit further may not necessarily doom it to continue falling as it could simply be printing the bottom of the channel as it really should be.
With price now below $6500, RSI on the hourly chart is looking for support around 38-40. Failure of support to hold should see price dropping to at least $6300 in the near term. MACD has dropped below its support line and %B has dropped into oversold. This latter indicator's movement should at least provide a slight reprieve for price and we may see some sideways movement, or even a slight pop, before a further drop. With the 6 a.m. CST candlestick printing a large degree of movement, a descending broadening wedge has formed. This is one of the best performing patterns in the markets, so it does provide a bit of hope. The pop in price I spoke about would likely occur as a bounce off/near the support line around $6400-$6450 and find resistance at the wedge's resistance line around $6600-$6650.
The 4 hour chart shows us that RSI was rejected at the secondary resistance level and is now targeting support at 37. %B has also hit its own resistance and is currently look for support at the next level down. However, price has already found support on the Tenkan line. If we were to see that bounce, there is a chance that we could see price push through the top of the wedge which would also see it exiting through the top of the larger descending channel shown on this time frame. That would have price targeting the Kijun line currently sitting at $6930. The bonus pattern I am seeing at the moment (and if you've been following me you know I'm not a fan of them) is that inverse head and shoulders. The volume profile fits the pattern as it should so far and we can see that RSI has been steadily increasing from its low at the creation of the point of the left shoulder. The bounce through the top of the descending broadening wedge and descending channel would likely send price through the neckline of the IHS. It is imperative that we see volume expanding as this happens in order to confirm this as a valid IHS pattern. The bright side in such a situation is that we should then see price ultimately targeting the $7300-$7400 area, depending on how long it takes price to breach the neckline.
With price now below $6500, RSI on the hourly chart is looking for support around 38-40. Failure of support to hold should see price dropping to at least $6300 in the near term. MACD has dropped below its support line and %B has dropped into oversold. This latter indicator's movement should at least provide a slight reprieve for price and we may see some sideways movement, or even a slight pop, before a further drop. With the 6 a.m. CST candlestick printing a large degree of movement, a descending broadening wedge has formed. This is one of the best performing patterns in the markets, so it does provide a bit of hope. The pop in price I spoke about would likely occur as a bounce off/near the support line around $6400-$6450 and find resistance at the wedge's resistance line around $6600-$6650.
The 4 hour chart shows us that RSI was rejected at the secondary resistance level and is now targeting support at 37. %B has also hit its own resistance and is currently look for support at the next level down. However, price has already found support on the Tenkan line. If we were to see that bounce, there is a chance that we could see price push through the top of the wedge which would also see it exiting through the top of the larger descending channel shown on this time frame. That would have price targeting the Kijun line currently sitting at $6930. The bonus pattern I am seeing at the moment (and if you've been following me you know I'm not a fan of them) is that inverse head and shoulders. The volume profile fits the pattern as it should so far and we can see that RSI has been steadily increasing from its low at the creation of the point of the left shoulder. The bounce through the top of the descending broadening wedge and descending channel would likely send price through the neckline of the IHS. It is imperative that we see volume expanding as this happens in order to confirm this as a valid IHS pattern. The bright side in such a situation is that we should then see price ultimately targeting the $7300-$7400 area, depending on how long it takes price to breach the neckline.
