Daily Outlook: We did not take a short yesterday thanks to CandlePRO - there was a hanging man on the 08:00 4h candle but CP gave it a lower formation strength (33%) and a very low profit factor rating (1.57 - we generally look for a minimum of 2.0 as it means the candlestick generally wins twice the amount of pips it loses using the TP/SL levels from backtester). The pair then smashed through 4350 resistance for large flag pole candlestick:
The latest bearish consolidation (top blue line on chart) appears to be a bullish flag pattern that signals more gains for the pair, especially given that the bottom rising trend support (bottom blue line) is still intact. We will look to follow a two pronged approach today, looking for longs on a topside break of the bullish flag pattern or a long on a dip to former support at 4350.
Trading Idea: Primary trade is a long on a sustained break above the falling trend resistance that is acting as the top of the bullish flag pattern, currently around 1.4450. Long targets from here are 4475, 4500, 4530 and 4560.
We will also look to long on a dip to 4350 support with candlestick confirmation. Long targets from here are 4375, 4400, 4430 and 4460.
Happy Pipping :)