The pair is trading sideways among the support at 131.10 and the resistance at 135.75 since the beginning of June; where the resistance for the trading range is resembled by the 61.8% Fibonacci correction previously breached.
After nearing the support for the trading range today, we expect the pair to head to the upside towards the resistance at 135.75 supported by oversold signals on momentum indicators especially Stochastic. Therefore, the sideways trading will prevail yet we do not expect it to last long, as reaching the target will push the pair strongly to the downside within the descending channel over medium term basis, while noting the bearish pattern signals which are seen over daily basis with the neckline at 131.10, where this bearish pattern will support the continuation of the main downside move towards 129.30 and 126.70. Therefore, we expect a intraday upside move in the coming period yet without extending beyond 135.75 followed by a downside reversal targeting 131.10 where breaching it will push the pair lower without the need to correct to the upside and ends the ongoing sideways trading.
By: Yasir Mubarak
Senior Technical Analyst