2 Feb 2015



The rate keeps trading in a tight range. It is currently testing the falling trendline from back in December.

A break above the trendline should take the rate up test the old support/new resistance area at 1.1460-1.1540, however only a daily close above this level would invalidate my immediate bearish bias for the pair.

A break below 1.1260 is needed for confirmation that the larger downtrend is ready to resume and rate is heading down to test the multi-year low at 1.1097 and major psychological support at 1.1000.


The rate seems to be forming a symmetrical triangle on H4 chart.

A break above the level of interest at 1.5100 should take the rate up to test the triangle's upper boundry  around 1.5200 and in turn a break of this level would confirm an inverse head and shoulders pattern and indicate the rate is ready for more serious recovery.

A daily close under the major psychological level at 1.5000 should take the rate down towards the previous long term turnaround around 1.4800 level.


After breaking the major psychological support at 0.8000 and tested it as the new resistance, the rate went to break another major support - the lower boundy of a two-year-long channel. It is now forming a bear flag to test this support as the new resistance.

A break below 0.7721 should take the rate down towards the long term rising trendline around 0.7300-0.7400 area.

Only a break back above 0.8000 would invalidate my medium term bearish outlook for the pair.


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