Yesterday the pair continued falling amid strengthening since the beginning of the week US Dollar .
The Dollar was supported by growing tensions in the Middle East between Saudi Arabia and Iran. In addition, the pair is under pressure amid slowing Chinese economy. The Caixin China Services PMI for December that was published on Wednesday showed a decline in the index from 51.2 to 50.2 points that was significantly worse than economists predicted. Furthermore, the AiG Performance of Services Index in Australia fell in December from 48.2 to 46.3 points.
Support and resistance
on the is turning horizontally while the price range is widening. At the same time, the indicator formed a signal for correctional growth as the price has left the lower border of the range. is falling and giving a very strong sell signal. is in the oversold zone and trying to turn sideways, thus indicating a possibility of an upward correction.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.7042 (local low), 0.7015, 0.6981 (end of September low), 0.6936 (29 September low), 0.6908 (4 September low).
Resistance levels: 0.7068 (local high), 0.7100 (psychologically important level), 0.7128, 0.7158, 0.7183, 0.7200 (5 January high), 0.7234, 0.7259.
Long positions can be opened after the price rebound from the level of 0.7015 (with the appropriate indicators signals) with targets at 0.7130, 0.7160, 0.7200 and stop-loss at 0.6960. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 0.7015 with the target at 0.6900 and stop-loss at 0.7070. Validity – 2-3 days.