By analyzing the daily chart we can see that earlier pair was heading south side and it’s making successively lower lows and lower highs by getting the supply pressure from downtrend line where each and every candle is supporting the bearish sentiments. Short term to intermediate term trend is down but after making the low of 1.2022 level we have witnessed a tug of war between bulls and bears where bulls won the game for the time being.
A strong counter attack from the bulls at the bottom end indicates trend reversal signal where bulls are leading and playing at the front foot. Downside risk is not over yet we will get further bullish confirmation once pair trades and settles above 1.2350, a daily closing above 1.2350 level will open break the bearish outlook, however there are high chances that we may see buying till that level without any hurdle.
In our previous report also we mentioned to short the pair from 1.2840 to 1.2500 and 1.2100 level and both targets have been achieved so we are expecting that our readers must have made profit from this move. The presently pair is trading at 3 week’s fresh high and a bullish marabuzo candlestick in the form of bullish engulfing candlestick posted on the daily chart which generates bullish signal on the daily chart. One more bullish signal can be observed on the weekly chart that a morning star price pattern is also in process of formation so today’s weekly closing matter a lot. If we see one more bullish session today then we may say that pair have been bottomed out and sit for long position for the target of 1.2511 and 1.2750 levels.
A bullish divergence of the RSI on daily chart suggest us trend reversal signal and it also suggest us that a rally is about to come. A bullish crossover on the MACD indicator is providing us bullish signal. RSI is also supporting the bullish sentiments from positive territory. The 1.2550 level is immediate resistance level followed by 1.2780 whereas 1.2100 level is strong key support level followed by 1.2000 level.