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You can watch the video explanation of this idea here
On the H1 chart, after the strong bullish move we had a correction in the form of a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which was respecting this range so far has broken above the top of it and is currently holding above it. We also had a bullish divergence that has formed between the first low that has formed at 0.87657 and the second low that has formed at 0.87627 based on the MACD indicator. Then the price moved higher and broke above the last high at 0.87977, we may consider these as evidences of bullish pressure. Currently it looks like a pullback is happening and the price is retesting this breakout and also there are no signs opposing this short term bullish view. Until the strong support zone (marked in blue) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further.
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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