This cross has been the main topic of conversation on the trading networks, as many people are stuck in a short position drawdown created by some EA’s entries. So, let’s analyze what the charts are telling us and see if it’s time to cut losses or let it go and decide later on.
On this chart, we see the price inside a descending channel, showing two top dynamic resistance levels (the upper channel lines) being the pink descending trend line the one with more price rejections. We observe, also that the main horizontal resistance levels are 126.800 and 127.500
Looking at the daily chart, we can see with more detail that the latest price action has been in a kind of horizontal channel with tops at 127.500 and 126.800 and bottoms at 123.600 approximately. We see, also, that the price is still making lower tops, inside that descending channel, except for this last leg up that has, so far, ended at its recent top from around the 18th of March.
Then, on the 240-minute chart, we can see that the cross has hit the 126.800 resistance line and has been rejected from there, making a kind of triple top formation, the last two candles (8 trading hours) showing weakness.
As we see, It not seems the right time to unload short positions. Right now, we can detect a potential price top, which can be confirmed if the price crosses convincingly below the 126.200 level, which was support for the price in the last price meanderings several times around these levels as evidenced by 4-H chart.
If we take into account all three charts, we can conclude that we can expect a price retracement, at least down to the 125.7 key level.
If the price moves above the 126.800 level, I’d close position and wait how it would behave when it touched the 127.500 resistance level. The level which is almost in confluence with the upper descending trend line (green) that is seen in the weekly and daily charts.