On the daily chart, the pair is trading just above the lower MA of Bollinger Bands that coincides with the EMA130 thus creating a strong support level. The RSI turned up towards its MA’s and formed small divergence with the price. The Composite tested its longer MA and also turned up. The indicator formed a more significant divergence with the price, however. Both indicators suggest a weakness of the market.
On the 4-hour chart, the price is growing towards the middle MA of Bollinger Bands. The price is trading below its EMA130, EMA65 and EMA13 that are heading down indicating the direction of a short-term trend. The RSI has failed its most recent support and is about to test its MA’s. The Composite, however, has formed a Bullish divergence with the price suggesting an upward correction.
Support levels: 4.3586 (local lows), 4.3540 (38.2% Fibonacci retracement for the short-term trend), 4.3470 (EMA130, lower MA of Bollinger Bands).
Resistance levels: 4.3813 (active trade), 4.3905 (local highs), 4.4269 (50% retracement).
Open short positions below the level of 4.3460 with the target at 4.3230 and stop-loss at 4.3540. Validity – 1-2 days.
Long positions can be opened above the level of 4.3915 with the target at 4.4210 and stop-loss at 4.3815. Validity – 1-2 days.