On the daily chart, the pair stopped at the 50% Fibonacci retracement and attempting to develop an upward impulse. The previous candle was closed below the bottom MA of Bollinger Bands, while the price is currently trading below the line. The EMA130 and EMA65 start turning down. The RSI reached its strong support level in the Bullish zone that it failed in September. The Composite is also approaching its support that it tested in the end of August. Both indicators formed a divergence with the price suggesting an upward reverse, however their MA’s indicate a significant weakness of the market.
On the 4-hour chart, the price is growing away from the lower MA of Bollinger Bands towards the middle MA of the indicator. Its EMA130, EMA65 and EMA13 are heading down indicating the direction of a short-term trend. The RSI remains just on the border of the oversold zone, while the Composite is approaching its longer MA.
Support levels: 0.6575 (50% retracement), 0.6500 (38.2% retracement), 0.6457 (October lows).
Resistance levels: 0.6649 (61.8% retracement, middle MA of Bollinger Bands), 0.6680 (active trade), 0.6732 (local highs).
Open short positions below the level of 0.6570 with the target at 0.6505 and stop-loss at 0.6598. Validity – 1-2 days.
Long positions can be opened above the level of 0.6660 with the target at 0.6745 and stop-loss at 0.6645.