The gap zone we discussed yesterday was fully filled, confirming the shift in the very short-term control to sellers and triggering a decline under the next support zone (highlighted in yesterday’s Lab Note #19).
Thanks to this move, today’s session saw a short-lived drop below the 50% retracement of the latest swing from 4150, approaching the price to the next important support zone (4200-4208) and encouraging bulls to step in.
But can they take control?
We’re seeing early bullish signals on both CCI and Stochastics plus (as mentioned earlier) the USD just hit its first intraday resistance. That creates a setup for a potential bullish breakout, but only if buyers can break above the upper line of the red declining wedge visible on H1.
If they can, we’ll likely see a move to at least 4252.85-4259.70 (today’s opening gap). If the buyers close it, the next target could be around 4281-4284 (78.6% of the last swing + the wedge target area marked with blue).
If they can’t (rejection from the wedge), we’ll likely see a test of the above-mentioned green support zone 4200-4208). However, a potential break below 4200 opens the path to 4172–4182 where the 38.2% retracement of the entire mid-November rally is.
Levels to Watch:
– Resistances: 4242 / 4255 / 4275–4280
– Supports: 4200 / 4172–4182
My takeaway: the pressure is building. Don’t front-run this. Let the wedge (in gold) and the first resistance zone (in the index) decide.
Another dot connected. Another trail unfolding. See you on the next chart.
Anna
Trading Lab Founder
