July 20 ,2018
By looking at the daily chart we can see that pair has made a fresh low of year 2018 at 1.2957 level and still seems too weak to move down further. Overall pair is falling down from 1.4376 level to 1.3048 level continuously and pair is making successively lower lows and lower highs on the daily chart. Well pair is heading towards south side and it is a purely downtrend in the pair.
Worst than expected UK retail sales sent the pair at downside and US President Trump criticism to Fed’s policy. The soft-reading coupled with Wednesday’s inflation to dent chances of an August hike. June Retail Sales, excluding volatile fuel prices, fell in the month by 0.6%, and increased 3.0% from a year earlier, missing expectations of 0.3% and 3.7% respectively.
Presently pair is trading below the moving average lines. A downtrend line is also lying on the daily chart and favoring the bears. We can observe that after a steep downfall some profit booking was expected due to dollar weakness. Overall short term to intermediate term trend is down so in a downtrend market sell on high will be profitable strategy.
Bears are still taking the charge and the way bears are reacting it seems like they are approaching the 1.2800 level in very short term. A correction after a downfall is a healthy sign for trend formation. We will keep our bias as bearish on the pair as long as 1.3500 level remains intact & odds are in favor of bears.
RSI along with MACD indicator both are providing us bearish signal for the time being and will support the bears. The 1.3450 level is immediate resistance level followed by 1.3550 whereas 1.29300 level is strong key support level followed by 1.2850 level.