Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
Peercoin fell more than graciously this morning, hitting a low of 2.7.
What’s clearly of interest to us is the retracement. The Fibonacci study extends from the high of 3.74, where price closed above the upper Bollinger band, until this morning’s low of 2.7.
Take a look at the PPC/USD M30 chart below (click to expand).
The Best PSPs for Forex Brokers in One UTIP App Go to article >>
As can be seen, the middle Bollinger line (which in fact is actually a 20 Simple Moving Average), has been following a smooth and accelerating downwards movement.
However, when price hit the low of 2.7, we could see how the Stochastics were oversold, indeed they had already crossed over, heading north. The Accelerator and Awesome Oscillator soon followed suit, turning green within the next couple of candles. Consequently, there was a retracement to the 61.8% Fib level at 3.345, but again, the middle Bollinger line is firmly heading down, so it’s hard to see this short term rise having any significant momentum.
In fact, ever since the retrace to 61.8%, price has been hugging the middle bollinger line for a number of hours. It’s been choppy, but there’s a clear correlation between price and that line for the time being. I wouldn’t expect that correlation to break any time soon, thus I’d expect price to touch 2.85 later today, on the condition price can break the relatively strong support at 3.000, a psychological round number which also coincides with the 23.6% Fib level.