June 1, 2018
Well earlier pair was making successively higher highs and higher low but after arriving at 1.0030 level which is a previous swing’s high, the bulls were unable to have further rally and it limited to that level. As it was a strong key resistance level so bears enter in the market and tried to dominate the bulls. Bears got the enough strenght for first phase and took it downside below all the major and minor EMA lines. Well from technical prospective we can see that potential double top pattern has been formed which indicates that it is just a starting further downfall is still awaited.
By applying the fibonacci retracement level from 0.9203 to 1.0030 level we can observe that if it is getting correction then the 38.2% retracement level will be at 0.9723 level followed by 50% retracement level 0.9621 level, so traders and investors are advised to go for short as risk appetite is towards the downside.
The 2 straight days of solid gains in the US Dollar Index made a steep reversal on Wednesday as traders’ focal point shifted to EU currencies. In the second half of the day, ADP private sector employment growth came in at 178K to miss the market expectations and the Q1 GDP growth estimate eased to 2.2% from 2.3%. Whereas the weak data reserved the bearish pressure on the US Dollar, the latest headlines from Italy pushed the index even further down toward the south side.
The way bears are reacting it seems like they are approaching the 0.9500 level in coming time. A clear bearish breakout on MACD indicator is also favoring the bears and generating bearish signal. RSI is also supporting the bears from the overbought territory. The 0.9750 level could be seen as first interim support followed by 0.9650 level whereas 1.0030 level is strong key resistance level. The odds are in favor of bears as long as the above mentioned key resistance level remain unbreached.
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