18 Aug 2015



The first thing that pops into aye when looking at the pair's daily chart is the massive RSI divergence. The rate has climbed higher more than 1000 pips, but the indicator shows a struggle and indicates some underlying weakness.

Another indication that favors a more serious pullback is the fact that since putting bottom in the place back in April (1.3881) the rate has rallied more than 3000 pips, but have had only a max. of 450 pip retracement.


The shorter term chart shows the rate has formed a double top and has already broken the neckline at  1.6830 which also should have acted as the new support after polarity change when it held the resistance since middle of July.

Although there are a lot of signs that  indicate further weakness on the pair, it's also important to remember that the rate still hasn't broken the most recent uptrend line from beginning of July, therefore, my plan goes like this -

  • Wait to see confirmation that the broken neckline at 1.6830 acts as a short term resistance
  • Enter a small short position
  • Wait to see, if rate can break the rising trendline
  • Wait for the rate to come back to test the broken rising trendline as the  new resistance
  • Scale into a larger short position
If you have any questions, please leave them in the comments below.


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