The price line on a strong resistance
USD/DKK started an ascending wave on 31st of March at 4 o’ clock, when it touched a support level. The price line could ascend more than 2.8% then in 6 days and 5 hours. At the moment the price line is approaching a resistance level and some bearish signals have been issued.
Chart Notes:
• Chart time-zone is UTC (+03:00)
• Candles’ time-frame is 1h.
The price line at the moment is showing 6.83742, which would be just below a strong resistance level. The level, which lays on 6.84135 – 6.89, has been shown as a blue area on the chart. The black ascending line indicates the trend line which has formed the current ascending wave. RSI is in the over buying area and has also issued negative divergence signal. MACD is showing price compression and is indicating a sharp wave to come. The blue zone below the price line, indicates the support area which has pumped the price line to shape the current ascending wave. Traders can be waiting for the price line to touch the resistance area, then they can enter short positions heading to the support area. For a lower risk position, they can be waiting for the price line to break below the black line then they can jump into the position on the retest.
Note that in case the price line breaks above the resistance level, the validity of this theory would largely reduce.
• DISCLAIMER: Please note that the above analysis is not an investment suggestion by “Capitalcore Ltd”. This post has been published only for educational purposes.