Yesterday closed as a bearish pin bar reversal on the daily for the EURNZD cross-pair, and represented the 4th lower high in a triple double top reversal pattern formation. Even though our last sell trade set-up on the 20th August invalidated itself after the volatility of Tuesday, last night gave us a bearish pin bar reversal.
This potentially bearish formation is well timed – after all, September is historically a bullish month for the Kiwi.
But what is so significant about last night’s bearish pin bar reversal?
Two reasons,
As you will see on the chart, it represents the point where the FOURTH LOWER HIGH was made on the daily timeframe. This signals a bias towards the downside. Whenever the bulls come to move price up, they get superseded by bears
Furthermore, it directly tested the 1.5831 horizontal level which correlates neatly with the previous swing low. The level, which once tested for support between March and May earlier this year, is now behaving as resistance – a key trait of a down-trending market.
EURNZD: CLOSE-UP OF POTENTIAL TRIPLE TOP ACCELERATION POINT
This could potentially be the acceleration point for the continuation of the prevailing downtrend for EURNZD to continue and for the long-anticipated “phase 1” extension leg to continue.
This pair has been trending for the past year, making lower highs and lower lows and price has retraced to an only support level and is testing it as resistance.
The old adage goes, the trend is your friend until the end when it bends. As EURNZD is in a well-established downtrend, it would make abundant sense to trade with it.
Many traders will use the break of yesterday’s low (Wednesday) as their entry point (below the low minus spread) with their stoploss above yesterday’s high (plus spread) for what could be a protracted long-term sell trade with the downtrend on the daily. After all, if yesterday’s low does break it will dramatically increase the likelihood of the formation of a triple top formation on the daily.
This potentially bearish formation is well timed – after all, September is historically a bullish month for the Kiwi.
But what is so significant about last night’s bearish pin bar reversal?
Two reasons,
As you will see on the chart, it represents the point where the FOURTH LOWER HIGH was made on the daily timeframe. This signals a bias towards the downside. Whenever the bulls come to move price up, they get superseded by bears
Furthermore, it directly tested the 1.5831 horizontal level which correlates neatly with the previous swing low. The level, which once tested for support between March and May earlier this year, is now behaving as resistance – a key trait of a down-trending market.
EURNZD: CLOSE-UP OF POTENTIAL TRIPLE TOP ACCELERATION POINT
This could potentially be the acceleration point for the continuation of the prevailing downtrend for EURNZD to continue and for the long-anticipated “phase 1” extension leg to continue.
This pair has been trending for the past year, making lower highs and lower lows and price has retraced to an only support level and is testing it as resistance.
The old adage goes, the trend is your friend until the end when it bends. As EURNZD is in a well-established downtrend, it would make abundant sense to trade with it.
Many traders will use the break of yesterday’s low (Wednesday) as their entry point (below the low minus spread) with their stoploss above yesterday’s high (plus spread) for what could be a protracted long-term sell trade with the downtrend on the daily. After all, if yesterday’s low does break it will dramatically increase the likelihood of the formation of a triple top formation on the daily.
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