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Google H4(4 Hours) Chart Analysis – Bullish Trend Pattern, Key Resistance Zone, Bearish Convergence Parabolic Sar, ADX Indicator
On the H4 chart, the price which was moving higher has created a bullish trend pattern that had completed itself. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. We also had a key resistance zone that had formed based on the 261.8% (1504.51) fibonacci expansion level of the first wave, the 61.8% (1532.15) fibonacci expansion level of the second wave, and the psychological level 1500. The price respected this key resistance zone and is holding below it. In addition to this, we had two false breaks with bearish divergence which has formed between the first high that has formed on 11th May 2020 and the second high that has formed on 23rd June 2020 based on the MACD indicator. Then the price moved lower and broke below the most recent low thus creating a bearish convergence for us, which we may consider as evidence of bearish pressure. Also based on the Parabolic Sar the dots are above the price which we may consider as another evidence of bearish pressure. In addition to this, the ADX indicator gave bearish signal at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. Based on all these my short term view is bearish here. Generally, after a bearish convergence, we may expect correction and then further continuation lower. Currently, it looks like a correction is happening, once this correction completes itself, we may then expect further continuation lower in the short term.
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