I had a look at this pair in some detail last week and wanted to check back to see how it was progressing. Remember that Median Line Analysis seeks to determine the path of price of a vehicle, defining it by means of a pitchfork and then to track the strengthening and weakening of trend along the angle of the drawn lines.
We last looked at the vehicle in the vicinity of the blue circle in Chart 1. We had followed price as it moved from the three touches at the Lower Parallel all the way to resistance at the Upper Parallel. What was interesting me was the stepping up of support that we were seeing in the line of the pitchfork – from the Lower Parallel to the blue dotted Sliding Parallel marked by the series of red circles. The first three red circles show where this line was resistance and later how it becomes support.
From the blue circle price does indeed rise once more to resistance at the Upper Parallel before falling again to our newly defined raised support. Despite the spike down seen in the third red circle we continue to see that the floor of the vehicle has risen in the line of the fork. As on the horizontal, when we see that the floor has risen we can anticipate that the same will happen with the ceiling. Accordingly it is no great surprise when the prior resistance along the Upper Parallel is breached and we see price push higher – in this case to the green circle where resistance is noted along the line of the outer Quartile. Note how just under the Upper Parallel we again have a blue dotted Sliding Parallel where resistance has once more became support.
From this Outer Quartile resistance there has been a strong reversal and we look to the chart to see where and why we have found support. As price fell one of the areas of potential support was along the line of the Lower Quartile. If you note the red arrows, it was a line that had previously acted both as support and resistance therefore it was an area to which we were looking for the same once more. Despite a fall of nearly 200 points from the green circle price did indeed find support along this Quartile and since the double touch at the line it has rebounded over 100 points.
By quickly establishing the path of price and watching the strengthening and weakening of trend along the lines defined by the pitchfork we are able to look for high probability areas of support and resistance in any vehicle on any timeframe.
The Cross Pair Analysis uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.
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