On the daily chart, the pair is trading near the lower MA of Bollinger Bands. The price closed below the line in the end of last week. The EMA65 start turning down, while the EMA130 is still horizontal and the pair is trading between them. The RSI is approaching its support at 32 mark that it failed to break through earlier and point out that a long-term upward trend is still not broken. The Composite, however, is growing. The indicator formed a divergence with the price and with the RSI suggesting a correction possibility in the pair.
On the 4-hour chart, the price remains below the middle MA of Bollinger Bands, while the bands are very narrow and directed sideways. Both the EMA130 and EMA65 are directed down indicating a short-term trend in the pair. Both the RSI and Composite are about to test their longer MA’s, though the RSI seems to have broken its trendline suggesting a fall could continue. Their MA’s, however, indicate some strength of the market.
Support levels: 3.1720 (local lows), 3.1665 (50% Fibonacci retracement), 3.1578 (EMA130, lower MA of Bollinger Bands on the daily chart), 3.0974 (38.2% retracement).
Resistance levels: 3.2085 (local highs), 3.2375 (61.8% retracement), 3.2553 (EMA65, EMA13 on the daily chart).
Short positions can be opened below the level of 3.1720 with the target at 3.1585 and stop-loss at 3.1786. Validity – 1-3 days.
Long positions can be opened from the level of 3.2240 with the target at 3.2336 and stop-loss at 3.2194. Validity – 1-2 days.