The pair broke the support at M_S1 early on the last week and then traded below this area the whole week. On the last part of the week, the bulls were a stronger and pushed the price above on the chart, reaching nearly the M_S1 again. We believe now that this support area is turned to resistance and if the price tests this area, there should be bears orders which will be triggered and push the price lower. We will be expecting a test of the M_S1 and if this happens we will try to enter a short position on the market, with sl located above the 0.7486 area, and looking to ride the move down to the M_S2 area. If price breaks the highlighted line at 0.7486 and closes above it, our analysis will no longer be valid.
Comment:
The pair opened on Sunday session very near the M_S1 at 0.74515 where we had planned our entry point, but the price then continued going down and did not reach this area to trigger our order. The pair is now trading at 0.73864 in the middle of the M_S1 and M_S2 channel, and we see higher probability now of a M_S2 test. In case the price tests M_S1 we will be looking to short the pair for a move down to M_S2. If price continues down, for now we will stay flat.
Comment:
The pair moved moved on the direction predicted during last Sunday Technical analysis session, reaching today the M_S2 level as we expected. However, on the first part of the week, the price did not reach the M_S1 level where our sell limit pending order was set so we stayed flat on the pair. For the next week, we should evaluate how the price action unfolds on tomorrow (Friday) so we can conclude if the support will hold and trade based on this premise.