On Friday, the pattern of absorption took place, which indicates an upward priority at the beginning of this week. The main resistance will come from the NCP 1/2 1.1713-1.1704.
Strong growth in the American session on Friday caused the breakdown of the first resistance zone of the NCP 1/4 1.1663-1.1658, which indicates a 70% probability of the next resistance test for NCP 1/2 1.1713-1.1704, where the fate of the downward movement will be determined. To stop growth and resume falling, you will need to keep the price below the specified zone in the American session. If this happens, the first goal of the fall will be a weekly short-term fault of 1.1606-1.1588, which has not been tested with a decrease in the previous week.
The downward movement still remains a priority, which makes it possible to search for sales at the NCP 1/2 test through a pattern or through a limit order setting. The size of the stop should not exceed 30 points, since the reduction potential is 100 pp.
To break the downward momentum, today's close of the American session above level 1.1713 is required. This will allow talking about the continuation of growth this week and 70% of the probability of renewing the July high. The absorption pattern on Friday was already formed at the American session, which indicates the possibility of a breakdown of the control zone. It remains to wait for confirmation and purchase will come to the fore. The risk-to-profit ratio will be profitable, but you should not rush to open a long position and it's better to wait for confirmation at the American session.
The daily short-term fault is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.
The weekly short-term fault is the weekly control zone. The zone formed by important futures market marks, which change several times a year.
The monthly short-term fault is the monthly control zone. The zone, which is a reflection of the average volatility over the past year.
The material has been provided by InstaForex Company - www.instaforex.com