As the pair has now slid below EMAs again, we see bears lining up at this level ahead of this week’s RBA and BOE’s decisions.
The formation of “Gravestone and long legged doji” is seen at 1.7462 and 1.7651 levels respectively after momentary rallies, subsequently, we’ve price holding stronger and formed whipsaws pattern on .
That is where, the oscillator has reached overbought region and been popping up with selling pressures since then, the attempts of %K crossover are not convincing while is slightly bears’ favour.
Although price bounces above, has remained below zero levels on both weekly and which is trajectory, so the major downtrend seems still robust.
On a broader perspective, the pair has now created a new environment as it has consistently remained below 21 monthly moving averages from last 6 months or so.
Bears can load weights in short as selling momentum is intensified by leading oscillators with mammoth volumes.
While no deviation from monthly , the lagging indicator also confirms the downtrend continuation.
Hence, we expect the retest of 21 month’s lows of 1.7044 in the weeks to come. So it is advisable staying short in mid-month contracts for the 1st target of 1.72 which is next strong support and upon breach of this level one can also look ahead 2nd target at 1.7044 by expiration but strict stop loss should be maintained at 1.7750 levels.