In this piece, we will describe the situation on EURCHF, where a week ago we were waiting for a buy signal. We did not say that there'd be a buy signal right now, but we acknowledged the possibility: “As long as we stay below the Fibo mentioned above, sentiment will remain negative, but the breakout of this line will give us a proper buy signal." This is what we wrote back then.
Patience is the virtue of every trader. Usually, you need to wait for the proper signal. In this case, it did not happen and the price dipped lower. Thursday was decisive here. The price broke the lower line of the flag and the short-term horizontal support. That gave a boost to the sellers and cleared the way south. Monday is bringing us a breakout of the green line connecting the bottom of the head and the right shoulder. That represents the total cancellation of the positive sentiment and opens the way for us towards new yearly lows.
The sell signal will be cancelled when there is a breakout at the black line. That resistance has been connecting the most important lower highs since April. The chances of that are rather slim.