On the daily chart, the pair is trading in the upper Bollinger band, just on the level of its EMA130 and EMA65, both directed horizontally. Pair’s long-term upward trend was broken in the end of August as both moving averages changed their directions, while the RSI tested its support in the oversold zone below 20 mark. However, the trend is likely to be restoring now as the RSI finds the support in the Bullish 50 mark zone. The Composite is about to test its MA’s that represent a strength of the market for both indicators.
On the 4-hour chart, the price is rising towards the upper MA of Bollinger Bands, while both the EMA130 and EMA65 are below the price and heading up representing the direction of the short-term trend. The RSI has tested its longer MA in the Bullish zone and turned up again. Shorter MA’s for both indicators turned up but have yet to cross the longer MA’s but the picture still remain quite Bullish.
Support levels: 120.81 (61.8% Fibonacci retracement for the short-term trend), 120.60 (50% retracement), 120.40 (38.2% retracement).
Resistance levels: 121.25 (active trade), 121.48 (local highs), 121.72 (upper MA of Bollinger Bands on the daily chart).
Open long positions from current prices with the target at 121.45 and stop-loss at 120.69. Validity – 1-2 days.