Areas of 76.4% Fibonacci held against the pair downside attempts within the descending channel over medium term basis; the pair rebounded to the upside towards the channel’s resistance where it neared those areas and settled for 137.75 on the third on this month.
We believe that the path is open for the pair to resume the short term upside move targeting 135.75 –the descending channel’s resistance level with 61.8% correction- the move is expected to be followed by a downside reversal to continue the medium term bearishness. Momentum indicators are pointing to the upside where we expect them to reach overbought areas at the target levels adding strength to the 200 Days MA which will support our expectations for the downside reversal. Downside targets are at 129.30 in an attempt to stabilize below it targeting next 126.50 and 122.85. It is critical to watch out for 135.75 areas as breaching it weakens the reversal expectations over medium term basis while the second level to watch is 129.30 support where breaching it will accelerate the bearishness.
By: Yasir Mubarak
Senior Technical Analyst