As previously discussed, this pair is in an uptrend. But currently is forming a down move. This down move is a strong retracement of the previous uptrend (where the Fibonacci retracement
is aligned). The current Resistance level
is at 1.6270 and Support level
at 1.5900. As can be seen in the chart, the Resistance is very significant here. It is aligned with the 0.618 level of the Fibonacci Retracement
. Many times this significant area was respected by the market. Recently, a gap formed at this Resistance level
, which is also an indication that the market still recognized this area. The current price is at/near the Resistance. This is very interesting because, although the solid trend is up, the market formed a strong down move and is now retesting the Resistance. If the today's bar does not close above this level, I would prefer to go Short. But if the price closed above, there would be no trade for me yet. Most traders will try to go Long because it is the "trade with the trend", but this pair is getting interesting. In this strong down move, I think this retesting of this resistance is the most important. If you look at the chart, on the down move, there is not much of a retracement (the down move is almost smooth that there was no room for a little up move).
I'm still bullish
with this currency pair (in the long term), but currently, I'm looking for a Short trade (short term).