This sell setup on the EURNZD (Euro/New Zealand Dollar) 4-hour chart is based on multiple technical analysis tools, which indicate a potential bearish move. Let’s break down the analysis in detail:
1. Trendline Resistance (Yellow Line)
A descending trendline has been drawn from the recent high, connecting lower highs, indicating a downtrend.
The price has tested this trendline and rejected it, signaling that sellers are still in control.
The chart suggests watching for price action confirmation at this level to trigger a sell.
2. Fibonacci Retracement Levels
Fibonacci retracement levels are applied to the previous major bullish move.
Key retracement levels visible include 38.2% (1.87883), 50.0% (1.86706), and 61.8% (1.85530).
The price is currently near the 38.2% retracement, and if it breaks lower, further downside towards 50% and 61.8% retracements is possible.
3. Supply Zone (Red Box)
A supply zone (red box) is marked around 1.89313, showing an area where sellers have previously stepped in.
The price attempted to retest this zone but was rejected.
This reinforces the probability of a sell-off from this level.
4. Lower High Formation
The market has been forming lower highs and lower lows, characteristic of a downtrend.
The recent price action suggests another lower high forming near the trendline, increasing the probability of further downside.
5. Target and Downside Projection (Blue Line)
A downward projection (blue line) suggests a potential target around 1.81700, aligning with the 100% Fibonacci extension.
If the price continues to respect the trendline resistance and breaks below the recent low, it could drop further towards this target.
Conclusion
The sell setup is based on the confluence of:
Trendline resistance
Fibonacci retracement rejection
Supply zone rejection
Lower high formation
Bearish price action expectation
Traders are advised to watch for bearish confirmation (e.g., rejections, engulfing patterns, or strong bearish candles) before entering a sell trade.
The stop-loss can be placed above the recent swing high near 1.89500, and the target could be around 1.817
1. Trendline Resistance (Yellow Line)
A descending trendline has been drawn from the recent high, connecting lower highs, indicating a downtrend.
The price has tested this trendline and rejected it, signaling that sellers are still in control.
The chart suggests watching for price action confirmation at this level to trigger a sell.
2. Fibonacci Retracement Levels
Fibonacci retracement levels are applied to the previous major bullish move.
Key retracement levels visible include 38.2% (1.87883), 50.0% (1.86706), and 61.8% (1.85530).
The price is currently near the 38.2% retracement, and if it breaks lower, further downside towards 50% and 61.8% retracements is possible.
3. Supply Zone (Red Box)
A supply zone (red box) is marked around 1.89313, showing an area where sellers have previously stepped in.
The price attempted to retest this zone but was rejected.
This reinforces the probability of a sell-off from this level.
4. Lower High Formation
The market has been forming lower highs and lower lows, characteristic of a downtrend.
The recent price action suggests another lower high forming near the trendline, increasing the probability of further downside.
5. Target and Downside Projection (Blue Line)
A downward projection (blue line) suggests a potential target around 1.81700, aligning with the 100% Fibonacci extension.
If the price continues to respect the trendline resistance and breaks below the recent low, it could drop further towards this target.
Conclusion
The sell setup is based on the confluence of:
Trendline resistance
Fibonacci retracement rejection
Supply zone rejection
Lower high formation
Bearish price action expectation
Traders are advised to watch for bearish confirmation (e.g., rejections, engulfing patterns, or strong bearish candles) before entering a sell trade.
The stop-loss can be placed above the recent swing high near 1.89500, and the target could be around 1.817
Note
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
For Training visit.
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.