The price made a retracement from 1.29795 and reached first resistance at 1.30968, which I mentioned in the previous week's analysis.
The price did not develop any bearish signal on the resistance level, so the bearish case was out of the calculation.
The price continued to move to the second resistance of 1.32077 and bounced back. The price bounce is visible as an indecision candle with large wicks. That candle represents indecision between sellers on the supply zone around 1.32077 level and buyers on the demand zone around 1.30968level.
On the following day, the price continued to move up to the 1.320777 level, which is strong resistance where horizontal and downtrend channel resistance is crossing. The price has stopped and does not move upwards for the three days.
The price is now on the indecision level, where we need to wait to see if the price will continue to move up or reverse and move down.
We have a strong resistance level on the upper side where the price couldn’t break above for three consecutive days. It is 1.32077 level which is the confluence of resistance.
If the price manages to break above, we could see price targeting 1.34123 as the next strong resistance.
On the downside, we have 1.30968 as the first support that needs to be broken to continue with the bearish sentiment. Below that, we still have the active support of 1.29795, which has kept the previous week's price from further decline.
We need to wait for the price to break above or below.
The market is still in a bearish trend, so I am more likely to look for bearish price action signals. Those signals could appear around the current level 1.32077 or supply zone, which is slightly lower than 1.32077 and 1.31800. Stop loss would be at 1.32500, above previous highs, which means hard to reach for the price.
The target would be 1.30150, which is the previous week's low and the demand zone's start.
Frano is an engineer, author, forex trader and the owner of a blog where he teaches forex courses for beginners. Frano created a website on how to trade forex to share his knowledge, market analysis which is also published on forexFactory.com, investing.com and many other trading related websites.