What we wanted to see was price break and close above this resistance confirming it as support. This would then have offered a long entry into the trend with around 600 pips of profit on the table towards the next key resistance of 1.5000.
But the breakout did not materialise and, instead, we can see that price made a swift turn around. The bears came in strong and have pushed price back to the support cluster of the 50SMA and the round number 1.4000. This keeps price within this current area of consolidation and so we still require a breakout.
All is not lost. The overall bias is still with price trading above the daily 200SMA amongst other key support levels. In addition, periods of of consolidation make an excellent foundation for trends to develop.
Remember, the longer the consolidation the bigger the breakout as the expression goes.
It is now a waiting game to see of price does breakout to the upside where we can add new positions to the long position already in play or if price weakens back to the 200SMA where we will look to exit our trade.
Any comments or questions, do not hesitate to leave them below. Hit agree if you share our sentiments!