H4 bullish three-drive pattern, anyone?

28 thg 6, 2020

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Support at 1.1904/1.2235 and long-term trendline resistance (1.7191) remain clear structure on the monthly timeframe, with the latter so far prompting a notable upper shadow this month shaped by way of a gravestone doji candlestick pattern. This is a Japanese candle formation, serving as an indication of a possible reversal to the downside.

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008, placing 1.1904/1.2235 in a vulnerable position.

Daily timeframe:

Thanks to Wednesday’s bearish outside day, demand at 1.2192/1.2361 re-entered sight Friday. This, as underscored in recent analysis, is an area not only fastened to the top edge of monthly support, it is also considered the decision point to break 1.2647 (April 14 high).

1.2235 (black level), the top edge of monthly support, will likely be a watched base within the aforesaid demand this week for a possible reversal.

H4 timeframe:

Since topping at supply from 1.2851/1.2805 early June, the pair has been in the process of constructing a bullish three-drive pattern that completes within the parapets of demand from 1.2231/1.2279, at a 127.2% Fib ext. level marked at 1.2239.

In order to complete the three-drive pattern, demand at 1.2304/1.2343 must be dethroned.

H1 timeframe:

US trade directed action lower Friday, making relatively quick work of the 1.24 level and also 1.2350, which, as you can see, was retested as resistance into the second half of the US session.

Fresh supply also formed at 1.2415/1.2386 as a result of recent selling. Recent trade also recognises the likelihood of a 1.23 test in the early stages of the week.

Structures of Interest:

Long term:

Monthly price has eyes for the top edge of support at 1.2235, located within the lower section of daily demand at 1.2192/1.2361.

Short term:

1.2235 on the monthly chart coincides nicely with 1.2239 on the H4 timeframe, our three-drive pattern. This offers attractive confluence to work with this week for a possible buying opportunity.

Before reaching this far south, a break of H4 demand at 1.2304/1.2343 is needed, as well as a break through 1.23 on the H1. Breaching the latter also presents a feasible bearish signal, likely to appeal to intraday sellers.