Yesterday the pair grew to its local highs amid some weakening in the USD that remains under pressure prior to the Fed Interest Rate Decision that is due today.
At the same time, the pair was pressured by poor data from Australia that came out on Monday. The National Australia Bank’s Business Confidence in December fell from 5 to 3 points, while the Business Conditions fell from 10 to 7 points.
Support and resistance
Bollinger Bands on the daily chart is turning horizontally while the price range is slowly widening. MACD is growing and giving a buy signal. Stochastic turned sideways near the overbought zone.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.7015 (local low), 0.6981, 0.6936, 0.6900 (21 January low), 0.6875, 0.6850, 0.6826 (15 January low).
Resistance levels: 0.7045 (22 January high), 0.7068, 0.7100, 0.7128, 0.7158 (6 January high), 0.7183, 0.7200.
Long positions can be opened after the breakout and consolidation above the level of 0.7045 with targets at 0.7100, 0.7130 and stop-loss at 0.7010. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 0.7000 with the target at 0.6940 and stop-loss at 0.7020. Validity – 2-3 days.