Stars Aligning, Triple Confluence Pointing To A HUGE Sell Off??Looks like the stars might be lining up for a big drop in this pair.
Here's what I see: three big signs (or "confluences") are showing up, suggesting either a quick drop or a longer downturn that could last months.
The first confluence is that we're in a Monthly SUPPLY/SELL zone. This is where prices dropped over 2,000 pips back in 2015, making it a prime focus for sellers to start building into positions.
The second confluence is a Monthly resistance at 92.5, which was the high point in 2015. It's also near the 2014 high at 94. If prices head up to 92.5, they could quickly spike to 93 or 94.
The third confluence is breaking above a Monthly trend line, something sellers will definitely keep an eye on.
On the daily and shorter time charts, price momentum is clearly slowing down evident with the MACD divergence signals appearing on the daily and 12-hour charts pointing to a possible drop.
Given these factors, a SELL scenario seems increasingly likely, and here's my strategy to capitalize on it.
I will start building into a position now and if price does continue to move higher towards 92.5 I will look for SELL signals on my TRFX indicator on the daily and 4 hour charts.
First target for this trade will be the weekly support around the 87 level, second target will be 83 area which is a strong Monthly support area.
This is a great trade idea and could actually turn into a monster of a trade if you are able to hold long term.
Hope you enjoyed the read.
