traded lower during the Asian morning Friday but hit support at 105.85 and then it rebounded strongly, to briefly overcome the overnight high of 106.43. Then, it pulled back again and is currently slightly below that barrier. Overall, the pair is printing higher highs and higher lows above the upside support line drawn from the low of Jan. 6 and thus, we would consider the near-term outlook to be positive for now.
If the bulls are strong enough to push the rate above 106.43 once again, then we may see them climbing towards the peak of Aug. 28, at 106.95. They may decide to take a break after hitting that zone, thereby allowing a small retreat, but as long as the rate would be trading above the aforementioned upside line, we would see decent chances for a rebound and even a break above 106.95. Something like that may open the path towards the peak of July 22, at 107.30.
Shifting attention to our short-term oscillators, we see that the RSI, already above 50, has turned up again, while the MACD lies above both its zero and trigger lines, pointing north as well. Both indicators detect accelerating upside speed and support the notion for further advances in this exchange rate.
In order to abandon the bullish case and start examining a bearish reversal, we would like to see a strong dip, below 104.92, marked by Monday’s and Tuesday’s lows. Such a move would not only take the rate below the upside support line, but would also confirm a forthcoming lower low on the daily chart. The bears may then dive towards the 104.40 zone, defined by the low of Feb. 10, the break of which may allow extensions towards the 104.08 or 103.90 levels, marked by the inside swing highs of Jan. 19 and 22 respectively.
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