Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
Peercoin's recent movement gives back half of its gains since the 24th, only to begin a period of consolidation.
Let's take a closer look at the PPC/USD chart on the H4 timeframe (click to expand):
I've performed the Fibonacci study from the year low at 2.6, to this week's high (25th of March, yesterday), at 2.8.
2.8 actually represents a major Fib retrace zone on the Daily timeframe, specifically the 61.8% Fib line. Here, on our intra-day analysis however, we're using it as the swing high for our study.
Now, take a look at the two candles marked in a red ellipse. They both had extremely long wicks and negligible lower wicks, evidence of bears taking a hold. In addition, the first of those candles closed above the upper Bollinger band, whilst the second opened above (naturally) the upper Bollinger band. In fact, even the following two candles had long upper wicks and zero lower wicks. By this time, the Accelerator Oscillator has turned red, and with the Stochastics approaching overbought territory, we saw price drop to the 50% retracement level (marked in blue).
The problem is, we now have conflicting technicals, which is why I expect we're going to be seeing continued ranging for the next few candles. Concerning the bull candle that closed after the 50% bounce, even though it closed as a bull candle, its upper wick is very long, a possible bearish sign, plus with the Awesome Oscillator turning red a couple of candles back, along with the smooth southern direction of the Stochastics, I just don't see price behaving with any sense of direction for the time being.
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