- 4H: The bullish scenario discussed in yesterday’s video update is materializing. (Refer to Daily Video Technical Update.)
- I noted that this rally should be treated as a retracement, and we should be looking for topping action to show weakness.
- The 1.38/1.3850 area is an important resistance. If that is broken the 1.39 area is also an important resistance.
- The key is to look for topping action, then observe the decline if one materializes. If the decline brings the stochastic back to the oversold area, BUT price action does not break below the 1.3450 area, we may be looking at bullish forces taking over.
- Daily: We see that the current support of 61.8% retracement and 123.6% extended retracement is holding up. Bottoming action at 1.35/1.3450 is followed by today’s strong bullish candle.
- But we do see that the 1.38-1.39 area is an important powerline, where we may see some resistance. This is also going to be coincident with the declining trendline, and would likely test the SMA 50.
- A break above may suggest further rally towards 1.43, which would also test the SMA200.
- On the downside. If the market tops off and continues to decline past 1.3450, the 1.3050/1.31 area is the next support (78.6% retracement).
Fan Yang
Currency Analyst
Commodity Trading Advisor
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