Bull and Bear Flags
Trading the Flag patterns
|Daily Euro US Dollar Forex Market Update|
|4 hour Euro US Dollar Forex Market Updates|
|1 hour Bear flag trading pattern|
As seen on the 1 hour chart, the 100 % fib extension of wave a-b moved to point c at about 1.2882 strengthened this support area. Market consolidated there but could not bounce back so that the following bear flag was created, and price broke down in the European session to the 1.2825 support level created by Weekly S1, Monthly S2 + the 100 % fib extension at point a (or point E on 4 hour chart) at 1.2825 and the most recent fib extension of wave c-d moved to point e at 1.2819. Market seems now to consolidate at this support level.
Bear/Bull flags show that the market is unable to bounce back from the support/ resistance level and erode these levels over time till the market stops consolidating and continues the trend (level can not be held any more after accumulation/ distribution is over).
In a strong trend the bull/ bear flags can repeat over and over till a rejection of the breakout occurs (price moves back into the consolidation) or the the bull/ bear flag fails (breakout of the consolidation is to the other side. Then, a turn around or larger consolidation could follow