The CADCHF has formed a large bearish engulfing bar (BEEB) on the daily chart. This BEEB is a huge engulfing bar that is smashing through a key area and making a break out of the Very Big Round Number (VBRN) of 0.9000 which has been a key level on this chart. Very Big Round Numbers often act as key psychological levels on Forex charts and on this chart we can see price has quite often acted as support and resistance before smashing through with the BEEB.
After this BEEB price has formed a very small indecision candle indicating that price could be winding up and getting ready for that next move. If price is to move lower we are going to have to see price take out today’s session low. This will be key for the market move lower. We can see that the indecision candle has formed an almost inverted Pin Bar. These inverted Pin Bar’s can often push price in the opposite directions which would mean price could push higher if the daily low is not taken out.
If price tries to move higher from this inverted Pin Bar the VBRN of 0.900 hangs over head which could act as resistance and also could act as a solid area for traders to target short trades. If price breaks the daily low it could move lower and into the near term lows around 0.8880.
CADCHF DAILY CHART | 6 AUG 2013
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