After a RSI bearish divergence detected the week before, the last week price action triggered a “Bearish Engulfing pattern” which should be seen as a second warning signal calling for a trend reversal !
Indeed, looking back we can see 2 clear trends and in monitoring the ongoing uptrend we can easily see the failure to confirm an upside breakout of the ongoing uptrend channel .
So, looking forward, it is likely to see further downside towards 1.4850 % first (38.2 % Fib ret & Tenkan-Sen), ahead of 1.4170 % (50% & Kijun-Sen).
Mid-Bollinger Band, slightly below and currently @ 1. 40 % should again be seen as the barometer indicator, having in mind the following mood :
Interesting to note that a failure to stay and hold above 1.4000 % on a weekly closing basis would confirm a downside breakout of this ongoing uptrend channel and potentially open the door for a new downtrend move, calling for 1.35 % – 1.25 %.
On the upside, only a clear breakout of the former high @ 1.7060 would neutralise the downside risk and would open the door for higher level towards 1.80-1.90 (former congestion top)
Daily (D1) :
Failure to recover both above TS and Mid Bollinger band on a daily closing basis should also be seen as a negative signal, calling for further downside. In addition, the 10 Years US Treasury is currently flirting with the Kijun-Sen important level support @ 1.550 %.
A daily closing level below 1.55 % would also add further selling pressure (yield) which would open the door for the levels above mentioned in my W1 analysis.
Watch the clouds on shorter intraday time frames which will help you to get intermediate signal (s) for validation or invalidation of the scenarios above mentioned.
H 4 : below the clouds
H1 : bottom of the clouds under attack
M30, M15, M5 : below the clouds
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