A Cautious Trend Continuation Idea 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.
• 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.
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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