has been trading in a recovery mode yesterday, after it hit support near the crossroads of the psychological round number of 0.7000 and the upside support line drawn from the low of Jan. 28.
Today, the pair broke above yesterday’s high of 0.7125, which suggests that the buyers have stayed in the driver’s seat. Thus, we will adopt a bullish stance for now.
In our view, the move above yesterday’s high of 0.7125 may have opened the way towards Thursday’s high of 0.7260. If that barrier is not able to halt the advance, its break will confirm a forthcoming higher high on the daily chart and may set the stage for extensions towards the peak of Dec. 3, 2018, near the 0.7375 area.
Taking a look at our short-term oscillators, we see that the RSI has recently rebounded from near its 50 line and continues to point up, while the MACD, already above its trigger line, has just turned positive. Both indicators suggest that the rate may have started gaining upside speed again, which enhances the case for more advances.
In order to abandon the bullish case, we would like to see a clear dip below 0.7000. This would confirm a forthcoming lower low and will also place the pair below the aforementioned short-term upside line. The bears may push the action towards the low of Feb. 18, at 0.6940, the break of which may allow extensions towards the low of the day before, at 0.6910. There, the rate may also test another upside support line, a medium-term one, drawn from the low of Oct. 20.
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