Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
Namecoin drops down to 2.65 as the bears continued at the end of the week, with some consolidation now being reached.
Let’s take a closer look at the NMC/USD chart on H1 (click to expand):
I’ve performed the Fibonacci study from the swing high at 3.225 until the month’s low at 2.65.
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First thing to mention is how, last Friday (21st), price touched 2.800 to the exact pip (circled in blue), before bouncing back up, although it has since come back down over the weekend near towards the latest low at 2.65.
2.800 is important, because it’s a psychological number, which a lot of traders use as support/resistance points. I had predicted on Thursday last week that this would happen, “…the bears are still very strong. Price could hit 2.8 later today or tomorrow.”
Indeed, since the bounce off 2.800, price continued to drop until 2.65, and soon after we saw a retrace to the 38.2% Fib level, (marked in a red circle); you can see how price tested this area twice in a row, before plummeting back down to near 0.0% again, telling us this is gearing up to be a relatively strong support zone.
Right now though, price is at 2.73, with the different technical indicators providing conflicting clues. One thing we do know though, is two of the last three candles have got huge upper wicks, and with the Accelerator Oscillator turning red very recently, we’d probably have seen another test of the low at 2.65. Yet, the Stochastics are actually heading up with corroboration from the Awesome Oscillator, so I expect price to continue to range for the rest of the day, with convergence of the Bollinger bands.
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