August 03, 2018
By looking at the 4 hourly chart we can see that pair is falling down with formation of successively lower lows and lower highs. The formation of swings indicates that it will fall down further to check the depth of the pair and bears are get more energy on day to day basis also.
Yesterday pair has collapsed due to BOE’s concerns about Brexit, but pair is still holding above the 1.3000 level which is the hope for buyers but once it trades and settles below this level we will see further panic selling in the pair as the main eyes will be on today’s US NFP data also.
Few days back it has made a fresh low of year 2018 at 1.2957 level but after testing that level we have seen many choppy sessions which was the signal for Tug of War between bulls and bears but yesterday we have seen complete day with bearish momentum. 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 1.3250 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 1.2900 level is strong key support level followed by 1.2850 level.
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