ADA/USD: Potential Bullish Scenario
Frano Grgić | Nov 29, 2021 06:39AM ET
ADA/USD has been bearish for the last two and half weeks when it was at the 2.32638 level. The price has found strong resistance at that level and could not break above since it had dropped below in September.
We have a bullish Gartley harmonic pattern formed on the chart, indicating that the price could move to the 2.05970 level. That is the first target for the price. It is also a level on the first resistance, which is a confluence of resistance.
Confluence consists of the downtrend channel and horizontal resistance. But, looking into the past, you can see that this resistance was not strong for the bullish move.
The second profit target at 2.45730 is above strong resistance where the price will have a hard time reaching.
If the break above this strong resistance happens, then the price will be in the bullish sentiment.
The entry point for the price is below the current price at 1.08100, which is right on the support level that held the price in the past from moving lower.
It is a strong support that will be hard to break. The stop-loss is at 0.89510, which is below lows since February this year. And since then, the price did not reach levels below.
So, the stop loss level is less likely to be reached. What we can see now is that the price has reached an uptrend line which could make it hard to reach lower levels where the entry-level is.
So, the potential reversal zone shows the entry-level can be anywhere from the current level, 1.56400. The risk to reward ratio is 5:1, which presents an excellent trading opportunity.
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