ETHUSD Perspective And Levels: Breakout Or Fakeout? The Sequel.

19 พ.ย. 2017

ETHUSD update: After breaking the 355 resistance zone high, price touches the 371 target before running out of steam. Is this market poised to break through the 400 level? The signs are not there. YET.

In my previous report, I wrote about the minor range breakout, the minor resistance within the larger resistance zone, and a potential retrace back to the 315 area.(It went to 320 instead). I also explained the 371 extension which price has now touched. Why is this market not going to the moon?

Here's why: Price has finally broken beyond resistance levels that have been in place for weeks now. That is certainly a bullish sign, but it has stopped within the fakeout zone which is capped by the 374 level (this zone is an extension measured from the 275 low). And touched the 271 extension (1.618 projected from the 286 low) and just stopped, forming an inside bar at the moment on this time frame. If the momentum was still present, it would keep going or at least close out on the highs of the candles.

Based on this price action, I am anticipating a minor retrace back to the 335 area (.382 of current bullish swing). That is also an old resistance which should now act as a new support (inversion). IF this market can produce a higher low in this area, the next leg up could be the 395 historical peak (it will have to break through the 371 high and close strong).

IF this market can break beyond 395, then the 406 extension is the next target (1.618 measured from the 321 low). Based on the way price is moving now, it is reasonable for this target to be reached within a week if structure remains bullish (remember things change fast).

The current candle has less than 8 hours to close. If it closes within the range of the previous candle and then breaks the high (currently 364), then bullish momentum is likely to continue. If instead it breaks the low (currently 350), then it is more likely to retest the 335 support. I am interested in a swing trade long IF the market can find support and a bullish reversal on a smaller time frame at that level.

In summary, this market is now showing significant signs of buying after breaking above the long time 355 resistance level. If price can maintain the bullish structure by presenting a higher low somewhere above 335, it is then more likely to retest the 392 level and beyond which makes it worthwhile for a swing trade strategy. I will be watching the 335 to 340 area for a bullish reversal either on a smaller time frame, or a candle on the larger time frames and evaluate risk from there. I will also be watching for a reestablishment of a rangebound market until a significant catalyst can come along and really drive price. In case of a range I will be looking for trades in the lower support area of 300, and 275 if this market decides to retest those levels (which does not look likely at the moment, but it is a good idea to be prepared). It is more important to be flexible and manage risk than anything else in this game. I report what the market is saying, not what I think or what anyone else says or writes. Forecasting is about analyzing clues and projecting scenarios that MAY or MAY NOT happen, and as the market unfolds you adjust based on the NEW information as it becomes available. That is what short term speculation is all about.

Comments and questions welcome.