After the past couple of days’ movement on Namecoin, it’s been somewhat of a boring affair this morning. However, this gives us some time to analyse what’s been going on, and what potentially could occur.
First things first. We need to make a Fib study. On an hourly chart, there’s no discretion needed here, the low and high are obvious, from 3.167 to 4.679, as can be seen below (click on chart to expand).
What that shows is something just as obvious. That the 50% Fib level was tested twice within a space of 12 hours, circled in blue. Tested, but not broken. Generally speaking, whenever you see certain levels get tested without being broken on multiple occasions, it strengthens that specific support or resistance level. And if that level does happen to break, you can expect
some decent movement.
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Right now, we’re seeing the Bollinger Bands slowly but surely squeeze together, so any break of either the upper of higher band isn’t going to be much of an issue.
However, if we scroll out to higher timeframes, specifically H4 and D1, we’ll see that price is still on a downwards slope. As the saying goes, “The trend is your friend”, which is quite frankly a bit of a nonsense saying, as there is a caveat which isn’t mentioned, “Until it bends”. Problem is, no-one knows when it’s going to bend, but I’m seeing signs in the charts that tells me there is a fair chance it could reverse next week. Time will tell.
For the short term however, what’s clear is that there’s not much movement today, which means Fib levels could be of even greater importance. Price is at around 4.047 right now, this will probably increase for a short while, as the Accelerator Oscillator is green, the Awesome Oscillator is green, and Stochastics seem to be on their way up. I expect price to hover between the 50% and 38.2% level for the next few hours.
Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.