EURAUD October 6th, 2023

6 окт. 2023 г.

I observe a consistent bullish channel that has been forming since September 2022. Within this broader bullish trend, there are notable minor trends exhibiting various patterns. The two most recent instances include the formation of a bearish channel and prior to that, a unfilled order or rectangle pattern.


1. Approach to Bullish Channel Support
The current price action indicates that I am nearing the support zone of the established bullish channel. This area (1) often acts as a significant level of demand, where buyers may become more active. Consequently, there is a potential for a bounce in prices as the market reacts to this support level, potentially driving prices towards the resistance area of the bullish channel (green).


2. Bullish Potential from Minor Bearish Channel Breakout (Bullish flag pattern)
The recent emergence of a bearish channel within the larger bullish context suggests a potential bullish reversal. Historically, such patterns often precede an upward movement. I interpret this as a signal that the bears are losing momentum, opening up possibilities for a bullish shift in the market sentiment. It's worth noting that the price has recently broken out of the resistance zone of the bearish channel. This breakout signals a potential upward movement, with the magnitude of the breakout potentially equal to the distance preceding the formation of the bearish channel. I interpret this as a bullish indication, suggesting that the price could rise to levels comparable to those before the bearish channel formation.

In summary, the combination of the bearish channel's potential reversal and the proximity to the support zone within the broader bullish channel suggests a favorable scenario for bullish momentum. I may anticipate a bounce from the support area, with the breakout from the bearish channel adding further weight to the potential upward movement.