On the daily chart, the pair is trading on the middle MA of Bollinger Bands. The price remains above the EMA130 and EMA65, both directed slightly upward. The RSI is retesting its longer MA. The indicator formed a Bullish divergence with the price. The Composite turned down to test its most recent support and also formed a Bullish divergence signal. However, their MA’s represent a current weakness of the market.
On the 4-hour chart, the price bounced off the middle MA of Bollinger Bands that coincides with the EMA65 and falls towards the lower MA of the indicator that coincides with the EMA130. Both MA’s turned horizontal. The RSI is falling towards yesterday’s support level. The Composite is about to test its MA’s. The pair is in a consolidation mode.
Support levels: 122.42 (local lows), 122.21 (lower MA of Bollinger Bands on the 4-hour chart), 121.50 (EMA65 on the daily chart).
Resistance levels: 122.70 (EMA65, middle MA of Bollinger Bands on the 4-hour chart), 123.15 (local highs), 123.39 (active trade).
Open long positions after the price rebound from the level of 122.50 with the target at 123.35 and stop-loss at 122.15. Validity – 1-3 days.
Short positons can be opened from the level of 122.15 with the target at 121.25 and stop-loss at 122.45. Validity – 1-3 days.