entered into a tumbling mode on Monday, after it hit resistance near the 0.7755 area. Yesterday, the fall drove the rate below the upside support line drawn from the low of Feb. 2, as well as below the key support of 0.7620, marked by the lows of Mar. 5 and 9. That said, the pair hit support near the 0.7585 level and then it rebounded somewhat. In our view, the dip below the upside support line may have increased the chances for more declines in the short run.
The current recovery may continue for a while more, but the bears may recharge from below the aforementioned upside line and push the rate down for another test near the 0.7585 zone. If they manage to break it this time around, we may see a test at the 0.7565 barrier, marked by the low of Feb. 2, the break of which may allow declines towards the 0.7515 territory, defined as a support by the low of Dec. 22.
Taking a look at our short-term oscillators, we see that the RSI turned up and exited its below-30 territory, while the MACD, although below both its zero and trigger lines, shows signs of bottoming as well. Both indicators detect slowing downside speed and add to our view that the current recovery may continue for a while more before the bears decide to take back control.
In order to abandon the bearish case, we would like to see a recovery above the 0.7655 level. This would also take the pair back above the upside line drawn from the low of Feb. 2. The bulls may then get encouraged to push the action towards the 0.7705 area, which acted as a strong support between Mar. 15 and 22, where another break may carry extensions towards the crossroads of the 0.7755 hurdle, marked by Monday’s high, and the downside resistance line taken from the peak of Feb. 25.
Disclaimer: The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval. 79.07% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure – https://www.jfdbrokers.com/en/legal/risk-disclosure .