Before Christmas holidays the pair traded in the range of 1.3663-1.3700; however today at the opening of European session the price managed to break down the upper limit of the channel. It seems that the pair faced resistance at the level of 1.3745, while support is expected at the level of 1.3700. Important economic releases are not scheduled for today; therefore strong movement in price is not expected.
In such situation it makes sense to take trading decision on the basis of technical indicators. On the four-hour chart indicators show uptrend. MACD histogram is in the positive zone, its volumes are increasing. Bollinger bands show divergence, confirming forecast of further rise in the pair; however the price has broken the Bollinger upper line, which can indicate a chance of downward correction.
Support and resistance
Resistance level is the local highs of 1.3745. Support levels are the limits of the channels: 1.3700 and 1.3663.
If current trend continues, it is advisable to open sell positions as part of corrective movement from resistance level of 1.3745 with the targets of 1.3700 and 1.3663.
Analyst of LiteForex Group of CompaniesPublication source