Notice the move between the low at A and the high at B. The market made a decisive low at the lower boundary in A and reversed with a choppy progression to the upside. It only rose as far as B where is found resistance and exhausted the upward momentum. It was unable to test the upper boundary and instead reversed back to the lower boundary first at C. Subsequently, the market reversed again and this time was able to test the upper boundary with a at X. The market's inability to test the upper limit after making the low at A may be construed as a weakness in sentiment.
Now look at the more recent price action. The market made a low at D and has since reversed and climbed as far as E. This is reminiscent of the move up to B, where the market was unable to retest the upper boundary. This may occur again if the market falls from here back to the lower boundary. This could, again, be interpreted as . So far the market has tested the lower boundary three times and the upper boundary only once. It appears there is more downward pressure keeping this market at bay.
That being said, the lower limit has held very well. Each test of the lower boundary has been followed by a very strong reversal. This is an interesting consolidation, and I'm waiting for more signals from the market as to whether the next trending phase will be a one or a one.
The more aggressive of you may be looking for trades within this line buying at the lower boundary or shorting at the upper boundary. Others will be waiting patiently for a breakout or a signal of a breakout to get in on the next larger trend which will probably be a much larger move. In tha case, the most important factor to watch is how the market reacts around the price barriers. So far the lower boundary has been tested a lot but has remained strong. If another retest of this boundary occurs, look for a change in behaviour. On the contrary, a retest of the upper boundary should be watched carefully too. There could be a lot of long orders around this level waiting to be triggered.