Technically, this sell-off has the potential to continue according to our analysis on the weekly chart. Weekly bears continue to reflect intentions from weekly supply at 1.1533-1.1278 that has capped this market since May 2015. The next downside target from this angle can be seen at 1.0796 – a weekly support. Down on the , price recently closed beyond daily demand at 1.1143-1.1179 (now acting supply), potentially clearing the rubble for a try at daily demand coming in at 1.1057-1.1108.
Our suggestions: Although direction is relatively clear on this pair at the moment (see above), trading short is tricky in our opinion. A sell from the H4 resistance at 1.1143 looks great at first glance, but when one looks over to the and notices that the top-side of daily demand is sitting just below it at 1.1108, risk/reward is pretty poor! Given the tight trading conditions here, we’re going to place this pair on the sidelines today and reassess going into tomorrow’s sessions.