Saturday, July 28, 2018

EUR/GBP : chart framework.

From a bullish trend (beginning in the end of the year 2016 and lasted until september, in the year 2018), the cross started a lateral trend. This is showed by the following chart where the uptrend is highlighted by the trendline and by the support lines and by the resistance lines (it means the main references : 0,83 and 0.93 ; 0.86 and 0.89). 

Chart from Investing.com

We get the same view if we use a different time frame, for example a month. The monthly time frame shows the chart framework in a better way for the reason that it provides a general overview. 
We can notice the same references and then at now we can notice that the price is testing the resistance area at about 0.89. This price level is important because it represents also both the closing and the opening price of the previous green candle and of the previous red candle (see the circled area) : there was a price retracement and a volatility exhaust ; the green candle represented a long upper shadow candle ; in other words, at the end, the sellers prevailed over the buyers. 
The BB are emblematic, in this way : see the median line compared to the price and see the light blue lines compared to the price. 

Chart from Investing.com

We have a confirmation of the trade change (bearish - bullish - lateral trend) also by the indications provided by MACD : we can notice the intersection of the yellow and red line (MACD and signal line) at the time of the overcoming of the zero line (see the light blue histograms), from the bottom upwards ; symmetrically, from the trend change bullish-lateral, from the top downwards. 

Chart from Investing.com

Lastly, the EMA bundle shows the market direction : the following chart shows the slope of the EMA bundle where the trend is bullish and it shows the lack of slope of the EMA bundle where the trend is lateral ; then, the distance between the exponential moving averages is more marked for obvious reasons, in the uptrend (in this way, the EMA bundle provides a useful indication). 
The RSI shows the overbought and the oversold, in the levels of 70 and 30, respectively, as usual : the passageway through the two areas marks the change of trend in the chart, inevitably.
Of course, as I said previously, it needs to pay attention to the test of the resistance area at about 0.89.

Chart from Investing.com

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