The EURGBP has fired off a False Break Pin Bar setup on the 8hr price action chart. This pin bar is making a false break of the recent resistance level with the nose of the pin bar clearly protruding up and through the key level. Price on this pair has been in a heavy down-trend for quite a few months now with price making solid retracements back higher into value areas, to then roll back over to continue back in-line with the strong trend back lower as the second chart shows below.
These trends are the best types of Forex trends to trade where price is continually making new lower lows, but then making pull-backs to allow traders the chance to get into the trend at value areas. Quite often there will be short sharp aggressive trends that make large moves, but they do not make any rotations back into value. Whilst these trends do not often last long, they can be very tricky and traders need to target getting into trends from value areas when price makes a rotation back into a key level within the trend.
If this pin bar can confirm and break lower, there is a close first level around the 0.7915 area. If price can gain momentum and break through this area and move lower the major support would then come in around the recent swing lows. If price does not move lower and makes a move back higher, the next key resistance level on the daily chart comes in around the 0.7975 area. This level is a major daily resistance and the last time it was tested, it fired off a large bearish engulfing bar.
If you want to start making 8hr charts with your MT4 charts like the 8hr chart below, then read the trading lesson Change MT4 Charts Time Frame Indicator to Any Time Frame You Want. This simple indicator will help you make any time frame chart you want to make on your MT4 charts.
EURGBP 8hr Chart – False Break Pin Bar
EURGBP 8hr Chart – Clear Down-Trend
hi Johnathon,
can you tell me how many retests of any support/resistance remains valid?
Hello Ali,
there are no set number of number that means price will or will not remain a valid support or resistance level. We are watching the level and the price action and what happens at the level and everything around it.
Johnathon