Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
For today’s analysis on Peercoin, I’ve performed the Fibonacci study from the low of this month on the 3rd of March at 2.79, to the high of the month at 3.89.
PPC/USD has been in a sideways motion since yesterday morning, as demonstrated by the rectangular channel in white in the hourly chart below (click to expand).
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As can be seen, the 38.2% Fibonacci retracement level acted as a strong magnet for some hours, resulting in a Bollinger Squeeze, but that squeeze could soon come to an end.
Let’s take a look at the potential reasons. The latest candle, just outside to the right of the rectangle, is looking rather bearish right now and if it closes as such, then we also have the Stochastics heading down and the Awesome Oscillator as red. This could be a trigger for price to make another push down, this time probably until the 50% level, just above 3.2.
Another reason for the compression becoming a southern expansion is due to a trendline on the M30 chart. Whilst this may not be the strongest of trendlines, nor on the most telling of timeframes, it’s still corroborates the bearish undertones of the escape from the squeeze (click on chart below to expand):
However, there are other conflicting signs, which may not make the expansion as smooth as potentially anticipated. Specifically, the Stochastics on H1 are approaching oversold levels, whilst price is below the lower Bollinger band, along with the Accelerator Oscillator having turned green. We could actually see a slight bump up later today, before heading down again.