ETHUSD produced a bearish daily candle on the daily chart yesterday. The candle closed within a level of support where the price bounced earlier. There is a strong possibility that the daily candle may end up producing a double bottom based on the support level. Today’s intraday price action has been bullish. If today’s candle closes as a bullish engulfing candle, then a breakout at the potential neckline may attract the buyers to go long on ETHUSD.
Let us have a look at the daily- ETHUSD chart.
The Daily Chart
The level of 182.55 has been the level of support. Look at the price action around this level. After having a bounce, the price went towards the level of 202.95. It came back at the support level and had a number of bounces. A bullish engulfing daily candle followed by a breakout at the resistance level would be a strong buy signal for the daily traders.
Let us have a look at the H4- ETHUSD chart.
The H4 Chart
The H4 chart’s price action suggests that the price had a strong bounce at the level of 182.55. The level of 195.50 is the level of resistance which is to be broken for the H4 buyers to attract to go long on the pair. There is another resistance very nearby. It may hold the H4 traders back for consolidation and then go long. As we have seen that resistance level is the potential neckline of the double bottom. Thus, the daily breakout candle may end up being a strong bullish daily candle with the flow of H4 traders’ long trades.
The Bottom Line
The support level holds the key here. At the moment, it looks good for the buyers. However, any downside breakout would change all these equations. Let us wait and see where it heads towards to make the next breakout.