After the 38.2% correction halted the pair’s downside move, the pair rushed to the upside within the short term upside channel; after reaching the channel’s resistance areas around 0.9220 trading reversed normally, yet over daily basis the downside move is likely to extend to the downside with the possibility of breaching the support and expand the bearishness.
The secondary image shows the formation of a bearish pattern with the neckline at 0.8925 where breaching this level activated the bearishness and supports the breach of the support to continue the downside correction mentioned above. The full downside target resides at 23.6% correction at 0.8605 and a retest for the breached support might be seen from there.The 100 Days MA supports the downside expectations and the pair is currently trading below it. The bearishness requires steady trading below 0.9055 and second the breach and stability below 0.8700.
By: Yasir Mubarak
Senior Technical Analyst