traded lower today, but hit support at 1.0420 and then, it rebounded somewhat. Overall, the rate continues to trend south, below a short-term downtrend line drawn from the high of November 18th, and thus, we will hold a bearish stance for now.
Even if the rate rebounds somewhat, it could still get held near the crossroads of the abovementioned downside line and the 1.0475 barrier, marked by yesterday’s high. The bears could recharge from there and push for another test at 1.0420. If they manage to overcome that level, the next barrier to watch out for is at 1.0390, marked near the inside swing high of August 6th, the break of which may carry more bearish implications, perhaps paving the way towards the 1.0335 zone, near the low of the next day.
Taking a look at our short-term oscillators, we see that the RSI hit support near 30 and turned up, while the MACD, although below both its zero and trigger lines, shows signs of bottoming as well. Both indicators detect negative momentum, but the fact that they show rebound signs suggests that some further recovery in the rate may be looming before the next negative leg.
On the upside, we would like to see a clear move above the 1.0475 level and the pre-discussed downside line before we abandon the bearish case. This may allow the bulls to aim for the high of December 3rd, at around 1.0520, the break of which could set the stage for the peak of November 28th, at around 1.0555.
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