On the daily chart, the pair bounced off the middle MA of Bollinger Bands and growing towards the upper MA of the indicator. The EMA65 turned up, while the EMA130 is still directed sideways. A longer-term descending trend was broken, however, as the RSI tested its overbought resistance at 73 earlier in the month. Both the RSI and Composite unsuccessfully tested their supports last Friday, while the price bounced off the trend line.
On the 4-hour chart, the pair is trading on the middle MA of Bollinger Bands, above the EMA65 and EMA130. Both moving averages are directed upward indicating that the short-term trend is ascending. The RSI and Composite are about to test their longer MA’s and if successful, the growth is likely to continue in the pair.
Support levels: 0.6731 (EMA65 on the 4-hour chart), 0.6645 (61.8% Fibonacci retracement, EMA130 on the 4-hour chart), 0.6577 (50% retracement).
Resistance levels: 0.6845 (local highs), 0.6863 (active trade), 0.7000 (psychologically important level).
Open long positions after the price rebound from the level of 0.6750 with the target at 0.6835 and stop-loss at 0.6731. Validity – 1-2 days.
Short positions can be opened from the level of 0.6725 with the target at 0.6655 and stop-loss at 0.6760. Validity – 1-2 days.