he pair continues to trade within the structured short term descending channel which is leading the corrective downside wave that was initiated with the breach of the bullish medium term trend as seen on the daily chart above. We can see the formation of a bearish pattern a double top pattern, where the pair breached its neckline at 0.6830 and currently the pair is retesting this breach.
Stochastic provided overbought signals which make us expect the resumption of the downside short term move to extend the bearish correction which we expect to reach 0.5935 which meets the targets of the aforesaid pattern.
We see that the pair will face strong support on its southern course at 0.6255 which might increase the volatility to retest the support for the bearish channel after its breach before resuming towards the expected target at 0.5935.
Note that breaching 0.7100 will signal the end of the downside move and the pair will return to the general bullishness over medium term basis and fails our expectations.
By: Yasir Mubarak
Main Technical Analyst