Updating our previous analysis for May 17, the pair succeeded in breaching the neckline for a bearish technical pattern mentioned previously at 0.8575, this breach took the pair to the 38.2% correction for the entire upside wave that started from 0.6007 towards the recorded top at 0.9405.
The pair rebounded from that level to the upside to retest the neckline which now turned into resistance that meets with the descending channel support over short term basis previously broken which had accelerated the bearish move seen.
Stochastic entered overbought areas alongside the retest for the mentioned level; accordingly we see that the pair will continue the downside correction targeting 0.7710.
Breaching 0.8575 and stabilizing above it weakens the expected scenario and might lead the pair higher towards 0.8870.
By: Yasir Mubarak
Main Technical Analyst