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EUR50 Index – Bearish outlook shown by the RSI

The EUR50 index is trading firmly above its uptrend line on a 4 hour time frame. We have also formed a descending triangle pattern which is near the upper end of the upward triangle. If these pattern breaks towards the downside, then it will also be breaking the downward trend line which is not a bullish sign.

The RSI is giving a clear sign of bearish outlook as there is a negative divergence between the price and the indicator. The negative divergence takes place when the movement of the price action is not confirmed by the price action. In the figure below you can see that the price hasn’t made much lower low but the RSI has- hence we have a negative divergence.

Important Zones 

3570-3519 Resistance

3216-3178 Support

Screen Shot 2015-11-01 at 18.56.14

 

 



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