At first glance, we can notice a pullback in the chart, from the previous top at 1,075.
The pullback comes from the upper band of the BBs. It is also highlighted by a candlestick pattern: specifically, a shooting star; its upper shadow (maximum) represents the stop loss of a short trading strategy; then, the red color and the following red candles are a reliable signal, for this purpose.
Anyway, it is too early to speak about a trend reversal even if this signal is a good starting point.
Let's look at the next trading sessions, at the crossover, respectively, of the RSI (repulsion from the overbought area, 70), of the MACD (cross of the signal and MACD line) and of the momentum (from above to below, the zero line).
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| Chart from Markets.com |
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| Chart from Markets.com |
With the confirmation of the trend reversal, it will be interesting the evolution of the chart framework, in particular, about the test of the yellow area, the rectangle, that previously, represented a trading range area, before the current bullish trend. The lows of the rectangle are the main references for the reason that these minimums and support levels were very important, in the past (38.20% FIBO retracement, 1.031/1.032). The same thing for the upper line (61.80% FIBO level, 1.053).
Finally, it is interesting also to look at the volatility: BBs, upper, lower and the median line (red line); the slope and the cross of the EMAs bundle (they are very flattened in the rectangle and TR area; otherwise, they are widely spaced in the bullish and bearish momentum). We can say the same of the parabolic SAR (the black dots).
