For this coming week, it is a tough call. I do not know whether to be a bull or bear. The price action is calling for both directions!! Why? Lets begin with the daily chart. The daily charts shows a bearish price action.
On the daily chart, we see:
1. Price action is bearish with a clearly defined falling channel with 3 confirmed points
2. Price is touching potential point 4 for this week
3. Pivot zone resistance from 15th Jan 2012 at 1.2650
On the 4hr chart, we see:
1. Price action is bullish with a rising channel with also 3 confirmed points
2. 1.2420-40 could be a new support zone
So what is the key to this dilemma? I think the key battle may be 1.2650.
1. Price must break above and stay above 1.2650
2. Price to stay within 4hr rising channel
3. Price to touch rising channel to form point 4 to create a 4th higher low in order to break above 1.2650
1. Price fails to break above 1.2650
2. Reversal patterns such as double top or head and shoulders to form on 1hr or 4hr chart
3. Price must not form a point 4 on 4hr rising channel
4. Price must break out from the 4hr rising channel
The following quality article is contributed by FMG who is an active forex trader. He is also the webmaster of http://www.forexmindgames.com/.