On the daily chart, the price is moving towards the middle MA of Bollinger Bands and is trading just underneath its EMA65 that is directed sideway. The EMA130 remains just above the upper MA of the indicator and it represents the downward direction in the pair. The RSI is declining to its trendline that formed in the end of August as well as it is going to test its support that served as a resistance earlier in the month. The Composite successfully tested its MA’s last Friday but now turned back again.
On the 4-hour chart, the price broke down the middle MA of Bollinger Bands but reversed up immediately after. The pair is trading above its EMA65 and EMA130 that are rising indicating a short-term direction in the pair. The Composite shows an oversold condition of the price and thus diverging with the RSI. MA’s for both indicators, however, suggest a short-term strength of the market.
Support levels: 86.55 (61.8% Fibonacci retracement, EMA130 on the 4-hour chart), 85.91 (50% retracement), 85.76 (local lows).
Resistance levels: 87.84 (active trade), 88.10 (local highs), 89.25 (psychologically important level).
Open long positions from current prices with the target at 87.84 and stop-loss at 87.05. Validity 1-2 days.