Price Declines and Formation of PatternsThe price exhibited negative reactions when encountering resistance within the $6.50 range, resulting in a sharp decline that broke the lower boundary of its triangle pattern. Over the given time frame, the currency's price has been confined within a range channel. This downward trend persisted, leading the price to reach the support range of $4.68 to $4.90. Notably, the previously identified support level of $5.20 to $5.50 has transformed into a formidable resistance level, prompting a strong negative response. Consequently, a new range channel has emerged, characterized by a lower range compared to the previous one.
Furthermore, there is a possibility of a double bottom pattern forming at a significant support level, although confirmation of this pattern would require a breakout above the $5.60 resistance. Simultaneously, an observation of a descending channel on the 4-hour chart implies that a breakthrough of the channel's upper boundary could signify a potential shift in trend, leading to price growth.
In terms of technical indicators, the Relative Strength Index (RSI) currently stands at 46. The RSI is a tool used to assess the strength and momentum of a price trend. With the RSI at 46, it indicates a moderately balanced market, where buying and selling pressures are relatively equal. This reading suggests that the price has experienced some downward movement but is not yet considered oversold. As a result, traders and analysts may interpret this RSI level as a neutral signal, implying a potential continuation of the current trend without any extreme buying or selling signals.
