Don’t ignore additional technical information when performing this type of analysis. For instance, immediately after the sharp down move in January (when the currency pair bounced off the 38.2 horizontal support level), price made a candlestick pattern called “three methods,” which consists of three days of counter movement to the existing downtrend. (This also could have been interpreted as a bear flag.)
The second consolidation around the 38.2-percent horizontal line formed another shorter-term bear flag, and once it started to unfold, it provided additional confidence in a bearish outlook.
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