A Cautious Trend Continuation Idea

Updated
Bullish Indications

• As per DOW’s theory Price action is registering Higher Highs and Higher Lows.
• Candle Stick pattern show Inverted Hammer is followed by Bullish Engulfing candle which indicates Bulls are in control.
• Support zone is at 1.23386 which can help price bounce up to continue bullish trend.
Linear Regression Channel with standard deviation 2 is used as trend line Support and Resistance. It is evident Price has respected
median line and moved back up.
Support Zone confluences with Fib Level 78.6% and price has respected it.
• Formation of Bullish Pennant, which indicates continuation of current trend.
• As per Seasonal Analysis, BXY remain Bullish until closing of 2nd week of January 2023 with an increment of
2.35% from December 2022. It is
safe to say it can sustain to close bullish for January Month.
• On the other hand, as per last 10 years seasonal BXY remain slightly bearish in January month.
Macro Analysis on 1 Day Time-Frame trend is Bullish.
Micro analysis on 15 Minutes Time-Frame Trend remains Bullish.
Hidden Bullish Divergence spotted on RSI oscillator.
Average Directional Index, which measures the trend direction strength and its value is at 31.96 which indicates trend is strong.

Bearish Indications

• Price action is approaching Resistance zone at 1.24103 which can bounce back.
DXY index analysis shows it to be testing a major support area which can provide a cushion for a bounce back which can result in trend
reversal upon confirmation.
snapshot

• AB=CD Harmonic Pattern indicates a reversal in trend is possible in area of 1.24526. But we can be only sure of reversal of trend if DOW’s
theory is valid for the trend.
• 10 years Seasonal analysis of DXY show it remain Bullish in January.
BXY index analysis shows it to be approaching a major resistance zone which can bounce back the trend.
snapshot


Analysis Takeaways:

As per facts available to us and projections we can assume that it is quite possible that trend will continue to be bullish with a short-term bounce back from resistance area and again will continue as biased. However, we can’t reject the possibility of trend reversal into a bearish trend as per market sentiments so we need to be cautious and safely take what we can until that happens.

Bias: Long

Plan (Long)
Entry Long: 1.23677 (Fib Lvl 88.6%)
TP: 1.24543 (Fib Lvl 100%)
TP2 : 1.25936 (Fib Lvl 1.27%)
Stop Loss: 123.066 (Fib level of 78.6%)
Risk/Reward: 1:3.94

Manage your Risk Accordingly and Remember Stop Loss is your friend.

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