Bearish Reaction May Continue

Certainly, today’s bearish reaction to new highs seems to lower the chance for a new trend high in the short term. At least until after there is a test of lower support levels. There are a few things to be aware of. Notice that resistance was seen around the confluence of several technical price targets, beginning with 4.33. A rising ABCD pattern (purple) reached its initial target from the pattern and therefore identified a possible pivot level. So far, the market reaction confirms this.

Upside Target Reached

In addition, to completing a target for the ABCD pattern today, a breakout above the top trendline of a rising channel also triggered on the way to 4.37. Resistance was seen around that line on the most recent swing high of 4.20. So, today’s price action shows a failed breakout of the channel. Once a failure occurs, the possibility of a swing in the other direction increases. That is what is being shown so far.

Key Support Anchored by 20-Day MA

The first lower trend support area is around the 20-Day MA, now at 3.62, along with an internal uptrend line. Moreover, the 20-Day line can be combined with the 50% retracement at 3.67 and the 2023 swing high of 3.64. The 2023 high has some significance and therefore a solid chance of being tested as support during a correction. Having the 20-Day line and 50% retracement nearby increases the chance for signs of support.

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