As we see, the market had previously finished an accumulation, advancement and distribution phase. Price had broken out of the distribution range to the downside but has now retraced back into the distribution zone. This latest price action could be a fake breakout, or could merely represent the beginning of an advance higher. A strong support level has been identified at the 61.8% level, which may give us an indication that price might fail to break this level and begin declining. However, the price may break above that level and continue to a resistance level established at the 78.6% level. If price breaks above this level it may well be returning within the distribution range and possibly move higher.
Trade active:
Price reached the 61.8% fib level and rejected the level 3 times on the 4H timeframe. Trade was entered once price properly retraced to the 61.8% level on the third touch. Placed my stop loss just above the wick of the first candle to reach the 61.8% level. This gave me 1:17 RRR. Price appears to be moving downward towards the 0% fib level, which is where I will be looking to close 30% of my initial position with an 8% return.
For those of you who have not yet entered this trade, look to enter on the break of structure at around 1.6150.
For those of you who have not yet entered this trade, look to enter on the break of structure at around 1.6150.