First chart is the monthly.
Looking at the right hand edge of the chart I can noted three candles. 1 is a push through of the top of the established range, 2 is not an uncommon candle and appears to be indecision, but it does close above the previous candle which is bullish. 3 is still forming and far too early to call. Above and left of price is where pro money shorted the pair back in May 2014. While all this may seem to be light years away, these price areas are clearly of interest to pro money and its best to be highly tuned to what takes place in them when price gets into them in the future. There are several types of pro money folks and it is the investor type who will become involved in this areas and hold for long periods of time and take the long term view. The daily price moves below the daily are nothing but noise to these people.
Far too many day traders also look and place too much decision making on time frames below 4hr. That is the ideal way to go broke.
Weekly chart.
Upper left is pro money shorting the market and the nice fall away to their target area. The bottom of a price range formed here and has had three tests of its lows and the most recent test will look like a bearish break out to day traders. Again, another nice way to go broke. The higher time frames is where you see the best clarity.
The blue line is the upper portion of the range and we have broken through and seen a failed test of the top of the range, only for that test to itself be false. The dip inside the range will again look like a bearish trip to the bottom of the range and many day traders get taken out. Price did close outside of the top of the range after and a strong move higher following that false bearish week.
FB is just short hand for false break, I try not to shorten words where possible and keep a chart clear and make it easier to see and read. The second last candle breaks the strong bullish candle and will have gotten day traders long as they will have seen continuation. It turned against them as I would have expected to take out stops, get shorts in the market and in turn, have them taken out again once the new price direction continues.
You should start seeing how pro money will milk the market of every chance it gets to get cheap orders in the market, by taking yours. This happens every day and will continue to do so as long as folks dont wait for established areas to be used again by pro money to load up.
An accurate old saying still holds true, buy low and sell high.
Daily chart
Blue line shows the old high price of the upper portion of the established price range. We have now seen price break through it and come back to test this upper range. There are a few tails on candles showing price pushes into the range where some day traders on low time frames will have been duped.
On the upper most candle we see a low close and selling came back into the market. The function of that candle was many, it tested how much selling would happen, it got day traders short, it brought price back into the origin of the bullish move up, and it stopped out day trader shorts, filled new pro money longs at the best price at the time.
At the current candle price we see it push into the area of where the FB candle topped out. If no major short reaction takes place, then price wont have much effort in making higher prices.
4hr chart.
A little closer in on the action here, and we can see the push higher and notice one interesting fact. The price action shown is not major selling. It has been more orderly and controlled. The price ends up at the origin and and reacts nicely, not a bear to the seen!
Soon after a nice upward thrusting candle pins the most recent sell off and takes out most of the short orders there and allows price rise with no major selling coming in. This is good news for the bulls.
1hr chart.
Lower blue indicates the upper price range tested and held. A large bullish candle spikes short term supply and assists price in getting back into the lower range of the candles that have risen from the upper price range test. The sellers will now have lesser ability to push price lower and some positioning has to be done by pro money to feed in orders where they can and where it wont be seen for an extended period of time. This is what sets up in where the choppy price action follows for some time. The lack of supply is the most helpful guide we have here.
Lastly, the last few candles show strong price movement upward and a close above the spike with little reaction short. This can only be good for higher prices.
The most obvious target will be the prices left of the chart could lead us into the close of the market this coming Friday.
