This article was first published on Orbex Forex Trading Blog.
This content is synced from the rightful owners. Copyright on text and images belong to the original source.
Falling shares in Hong Kong drove the Hang Seng index to a 3-month low of 22500 this morning.
With prices bouncing off of the multiyear trendline support TS1, a rebound is likely. The trendline connects the Oct ’08 and Fed ’16 lows at 10600 and 18250, respectively.
Despite bears having pushed prices below the multiyear support on Mar 18, ’20 the immediate recovery suggests a false break. That said, the recovery could continue to fresh multi-week highs close to or above the 25000 round resistance.
The 1-hour chart below shows a head and shoulders pattern. This is usually a continuation, not a reversal pattern.
Since the correction preceding the continuation seems to have been already clocked in at 61.80% of the 21150-24850 move, more upside can be expected.
Having prices reaching fresh highs above the ‘head’ higher could lead to an RSI signal, either bearish or bullish.
In case we see prices breaking above the neckline once again, we can expect fresh highs...
To keep reading this article, please navigate to: Orbex Forex Trading Blog.