Looking at the long-term trend on the monthly scale, there is a possibility of a breakout happening in the near future. Price has been forming higher highs and higher lows, suggesting that there is bullish momentum building up. The recent higher low at $1.2037 in October 2023 indicates that buyers are stepping in at higher levels, potentially leading to a break higher.
On the daily timeframe, price has broken above a key resistance level at $1.2683, after finding support at a Fibonacci retracement zone. This indicates that buyers are in control and are pushing price higher. As long as price remains above $1.2683, there is limited resistance overhead, suggesting that the path of least resistance is to the upside.
Short-Term Reversal Pattern on H1 Timeframe
In the short term, price action on the H1 timeframe is forming an inverted head and shoulders reversal pattern. This pattern typically signals a reversal of the current trend, with the neckline acting as a key level to watch. If price breaks above the neckline at around $1.2702, it could trigger a bullish move towards the resistance level at $1.2721.
Chart pattern enthusiasts may be looking to plot the profit objective of the inverted head and shoulders pattern. By measuring the distance from the head to the neckline and extending it from the breakout point, traders can set a target for the potential upside move. However, it is important to note that the resistance level at $1.2721 may act as a hurdle for buyers looking to enter long positions above the neckline.
Overall, the combination of bullish price action on the monthly, daily, and H1 timeframes suggests that there is a potential breakout on the horizon. Traders will be closely watching key resistance levels and chart patterns for confirmation of the bullish bias in the market.