Analysis provided by Ashton Fraser, learn more about his trading strategies with the Forex Reversal indicator.
After another drop to 0.0050, Peercoin vs Bitcoin regains some value, only if it may be for a short while yet.
Let’s take a closer look at the PPC/BTC H1 chart below (click to expand):
I’ve performed the Fibonacci study from the major swing high in early March (4th), to the year’s low at 0.0050.
It’s interesting to note that price hasn’t yet been able to push below 0.0050, for a number of reasons.
1. 0.0050 is a major psychological number, therefore support or resistance here is to be expected.
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2. This level has been tested previously in March on three separate occasions.
3. It’s a Fibonacci extension – 423.6% as can be seen below on the H1 chart:
To be fair, a lot of traders could have missed this, it’s not an easy one to catch, since the Fib study for this extension applies to the previous noticeable swing low to swing high, which on some occasions (such as this), can be rather discretionary. Nevertheless, the extension exists, and 423.6% is often a popular target level. At the very least, it’s another corroborating factor in why price reacted to this level.
Jumping back to the first chart at the very top, we can see how price, after bouncing off 0.0050, for the three reasons discussed above, managed to retrace all the way back to the 61.8% Fib level at 0.00538 (circled in orange), before coming down and touching the 38.2% Fib level at 0.00522.
However, the overall trend is still bearish, so it’s unlikely this retrace will travel much further. Plus, with the Stochastics now in oversold territory and the Accelerator Oscillator turning green, I expect price to continue to bounce around the 50% level at 0.00530.
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