According to my trading plan, I am to start the analysis of a currency pair by looking at the weekly or monthly chart. Here, I am looking at the monthly chart and have drawn a down trend-line acting as resistance. It takes two Swing Points to draw a trend-line, and it takes a third swing point to validate it. Once a trend-line is validated, I expect price to respect this trend-line until proven otherwise. I have also added a down trend-line acting as support. This trend-line has not yet been validated, so price action can more easily breakdown below this support line. When price action is moving between a support line and a resistance line, I expect the price to move to a support line, bounce off it, and move back up to the resistance line. Further, when price action is moving between a support line and a resistance line, I expect the price to move up to the resistance line, bounce off it, and move back down to the support line. The last bounce off a support or resistance line was when price bounced off resistance; as such, I now expect price action to continue lower until price moves down to the support line.
