In the previous analysis we identified a cup and handle pattern which was confirmed once it snapped out of the price channel
The upward momentum was beautiful and on point. Those who entered the trade, congratulations. However, like gravity, everything that goes up, has to come down. If we take the 4H chart we see an evening star has formed in the previous candle. Depending on how the current candle closes we might be see a bearish reversal. If the candle closes red, the evening star is confirmed and it's highly likely we'll see a pullback. It's likely it will will retrace to the 7.60 support area which is around the area where the 50 EMA will meet. If it breaks that support area, we'll likely see it tumble back to the 6.78 area.
However, in the off chance that it closes green, the pattern is invalidated and so is this chart. In that case we need to make a new analysis.
Trade safely.
The upward momentum was beautiful and on point. Those who entered the trade, congratulations. However, like gravity, everything that goes up, has to come down. If we take the 4H chart we see an evening star has formed in the previous candle. Depending on how the current candle closes we might be see a bearish reversal. If the candle closes red, the evening star is confirmed and it's highly likely we'll see a pullback. It's likely it will will retrace to the 7.60 support area which is around the area where the 50 EMA will meet. If it breaks that support area, we'll likely see it tumble back to the 6.78 area.
However, in the off chance that it closes green, the pattern is invalidated and so is this chart. In that case we need to make a new analysis.
Trade safely.
