Yesterday the pair fell and moved away from local highs. A downward correction in the pair was happening amid growing risk appetite on the market after the publication of strong data on the Chinese Trade Balance that lowered worries on the markets.
At the same time, the pair is pressured by strengthening US Dollar. In addition, on Tuesday the Turkish stock index Borsa Istanbul 100 showed a sharp decline after the news about explosion in tourist district of Istanbul came out, thus pressuring the Lira.
Support and resistance
Bollinger Bands on the daily chart is growing while the price range is widening from the top. At the same time, the indicator has formed a signal for correctional decline. MACD is trying to turn down forming a sell signal. Stochastic left the overbought zone indicating a downward correction in the pair.
The indicators recommend considering short positions.
Support levels: 3.0050 (local low), 2.9837 (8 January low), 2.9573, 2.9295, 2.9000 (beginning of December low), 2.8702 (3 December low).
Resistance levels: 3.0268 (local high), 3.0476 (12 January high), 3.0678 (29 September high), 3.0742 (24 September high).
Long positions can be opened after the breakout of the levels of 3.0268, 3.0476 (with the appropriate indicators signals) with targets at 3.0678, 3.0742 and stop-loss between 3.0050 and 3.0268. Validity – 2-3 days.
Short positions can be opened after the price consolidation below the level of 3.0050 with the target at 2.9800 and stop-loss at 3.0150. Validity – 2-4 days.