Our pair is currently in an ascending triangle pattern, which according to the Theory, is about to break. We have two scenarios:
First scenario: (Yellow)
- Price breaks the triangle
- Goes 60 pips down to the trend line
- Then goes back up in a bull run
Second scenario: (Red)
- Price breaks the triangle
- Goes 60 pips down to the trend line
- Breaks the trend line (*)
- Retests and then rides the bears till the next major S/R level
(*) In the long run, there's a reason that the price could possibly break the trend line and that is because in the long term chart the price is in a bullish flag pattern which is a correcting wave after a huge fall.
First scenario: (Yellow)
- Price breaks the triangle
- Goes 60 pips down to the trend line
- Then goes back up in a bull run
Second scenario: (Red)
- Price breaks the triangle
- Goes 60 pips down to the trend line
- Breaks the trend line (*)
- Retests and then rides the bears till the next major S/R level
(*) In the long run, there's a reason that the price could possibly break the trend line and that is because in the long term chart the price is in a bullish flag pattern which is a correcting wave after a huge fall.
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Eyes on S/R reaction of the price...