Looking at the EURCAD 8 hour Chart today where an interesting situation has formed.
An inside Candle has printed – demonstrating the market has stalled as a result of the market bumping into this swing level. The inside candle is a reflection of the market thinking ‘hmm, what should we do now?’
Inside candles that form at points on the chart where a ‘break or bounce’ decision needs to be made usually provide the better breakouts.
Although this 8 hour chart looks reasonably bullish with it’s higher highs and higher lower, I think it’s a bit deceptive. Top-down analysis is key for swing trading, and the weekly and daily chart both look bearish.
This inside candle on the 8 hour chart basically represents the Asia session price action. If you can get on the 8 hour charts, you will noticed it is common for an ‘Asia session inside candle’ to form, which is then followed by a breakout during the money sessions (London & US).
I am only interested in a downside breakout here, as the weekly and daily chart are communicating lower prices a likely.
The weekly chart shows the market bouncing off weekly resistance, and the daily chart shows a bearish mean reversion underway.
Looking for bearish breaks of the 8 hour candle low for short opportunities.
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