On the daily chart, the price is moving up from the bottom MA of Bollinger Bands. A long-term uptrend does not seem to be broken yet as EMA130 is still directed up, while the RSI failed it support at 31.6. However, there is a chance that the pair has formed a double top formation earlier in September. If it is true, the critical point is going to be the area of 2.9744-2.9705, a breakout of which might resume the growth. The RSI and Composite are growing towards their MA’s, which indicate a weakness of the market as the shorter MA remains underneath the longer one.
On the 4-hour chart, the price has nearly reached the upper MA of Bollinger Bands, which forms a strong resistance as it coincides with the 61.8% retracement near the level of 2.9595. The RSI and Composite formed a divergence warning of the approaching downward price reverse. The RSI is retesting its resistance that it failed to overcome yesterday.
Support levels: 2.9226 (50% retracement, middle MA of Bollinger Bands on the 4-hour chart), 2.8910 (psychologically important level), 2.8840 (early August lows).
Resistance levels: 2.9557 (October lows), 2.9595 (61.8% retracement), 2.9705 (beginning of September lows), 2.9744 (September lows), 2.9798 (50% retracement for a short-term trend).
Long positions can be opened after the breakout of the level of 2.9600 with the target at 2.9695 and stop-loss at 2.9557. Validity – 1-2 days.
Short positions can be opened below the level of 2.9226 with the target at 2.8922 and stop-loss at 2.9260. Validity – 1-3 days.