Background: This pair shows a nice uptrend and we currently came to an halt at a very important key level @185 ,which is the 50% retracement level of the downmove from 2007-2009, price reacted at this level but we didnt rejected it , ie. price is holding its gains thus far and forming a range, where the resistance is @185 and support is a former broken resistance level @174.5 ,
we have to take notice the buying pressure was stronger as we approached the 185 level as can be seen on the pace,momentum and extend of the rallys which are steeper and longer then the selling waves , however as we sit at this resistance level we not only found balance in the form of the trading range but in the buying vs. selling pressure aswell it is not quite clear who has the upperhand right now, therefore we need further signs to judge the course of the market , whereas a break of resistance + a successfull retest (pullback) indicates strenght , while a break of the demandlevel (green) followed by a lower high can be seen as weak however true weakness will reveal itself if we break support @174.5 and price trades back below the fromer range
Signs of Strenght:
Up Trend
Broken resistance turned support
Holding gains
Signs of Weakness:
185 key level still holds (50%)
buying vs selling pressure equals out (sellers confront buyers )
Key Level above current price: 185 197
Key level below current price: 180.5 174.5 171.35
sidenote: A 50% retracemnt level can be used to judge a markets strenght or weakness , as usually if price trades right thru such level one can think of participants capitulate , whereas if we hold/reject such a level one can assume that either the trading activity is lacking and therefore price is of unfair value (rejection) or this level can be seen as a new opportunity for participants to get into the market at a better price to anticiate a further move in the preceeding direction , (increased activity ), so it all boils down to what price is capable to do and what not ,at certain levels