On this eurusd daily chart price has been moving sideways for four days now.
The drawn resistance zone is the area of 1.13750 to 1.13000.
The last candles have been a spinning doji, a harami and a small dragonfly.
A doji means indecision and when at resistance then they may indicate a reversal.
Therefore a sell is sugested if the next candle or candles close below the low of yesterdays candle.
So if price dips below 1.13250 it takes out the previous low and we receive confirmation that in fact bearish pressure is overcoming bullish pressure.
We only trade when price confirms our bias.
The stochastic indicator is at the 80% level and shows bearish divergence.
If the next candles take price higher then this trade idea is invalidated.
On this 4 hour chart I trapped price. The bearish divergence is also evident on this time frame.
If price breaks below the lower yellow boundary then a sell is more certain confirmed by price.
Ideally we would trade in direction of the stochastic indicator.
How a potential set up might look like if we fine tune our entry on the 15 min chart might be something like this.
Price moves up to resistance of the previous highs and then needs to turn to keep our trade idea valid.
The stop loss goes over the highs and a bearish double top or 123 pattern can serve as confirmation for our bearish trade idea.
I wish you the BEST OF PIPS