Having a look at the attached chart, we could see that the upside wave ambition was hit by strong wall represented by 38.2% Fibonacci level located at 89.61, in which the SMA-200 has added more strength to this Fibonacci level strength, therefore, the index was forced to decline again trying to re-arrange itself.

The down bouncing has stopped around 74.16 level, while the index inclined again closing to the same Fibonacci level (at 89.61), this upside action -represented by the second attempt- is about to complete forming a bullish pattern structure that has the ambitions and hopes of achieving more and more upside correctional action.

This pattern is “ Double bottom “, pointed with the B1 and B2 in the above chart, with neckline level matches the 89.61 level, and this is what makes this level the most critical levels to monitor as it has the keys to determine the fate of the med-term trend that still inside the upside correction of the main big decline mentioned in the beginning of this report.

If the index  succeeded to have clear breach for this level accompanied with monthly close above it, then we’ll be waiting for an up trend scenario with it’s first targets located at 95.50, followed by some downside correction to re-test the breached neckline before resuming the expected upside action that has targets extends to 61.8% Fibonacci level around 101.40.

Its so important to note some important issues:

1-     the med-term trend still to the downside, and we need the expected clear breach for the mentioned neckline level to confirm turning into med-term up trend.

2-     Momentum indicators show overbought signs, that is expected to cause some mixed fluctuations particularly during the attempts to breach the waited critical resistance.

3-     The waited med-term uptrend is considered as an upside correction for the allover major down trend of the index, this major trend will remain valid unless we witnessed a brave attempts by the index to breach the critical 61.8% Fibonacci level at 101.40.

Its so important to note that the expected upside scenario remains valid except seeing clear break with stability below 79.76 level.

Georgia Anderson` Financial News Network, trader, trader education, online forex, daytrader,forex currency, forex software, investors, forex trading, forex.