Tuesday's failure to hold above the falling trend line resistance followed by a drop to 7446 adds credence to the bearish price RSI divergence and points to further drop in the prices to 7380 (head and shoulders neckline).
A daily close below 7380 would indicate trend reversal and open doors for 7161 (target as per measured height method).
Double top neckline is seen at $1214.40.
The 61.8% Fib retracement is seen at $1245.59. multiple daily close below the same would signal a sell-off to $1214.40.
The daily RSI shows sufficient space for a sell-off to neckline support.
Price action over the previous two weeks...Doji followed by bullish candle, signals the spot may have bottomed out...
Spot likely to cut through 111.60 (Feb low) and test supply around 114.37 (May high) over the next few weeks
The erratic recovery from 7378 (June 15 low) signals the sell-off from the high of 7599 has run out of steam, although the bulls would still want to see a break above 7530 (falling trend line) before betting on fresh record highs.
On the downside, only a daily close below 7449 would revive the bearish view.
Last week's Spinning top candle signals bullish exhaustion. A bearish follow through this week would signal the rally from the January low of 1.0341 has ended. On the higher side, we want to see a daily close above 1.1285 before turning bullish again.
1.2818 is the high of Wednesday's Doji candle
1.2690 is the low of Thursday's Doji candle.
We wait for a break of the trading range. A downside break would open doors for 1.2635 (June 9 low).
An upside break would expose 1.2844 (May 12 low).
The positive action today may force one to question the breakdown seen over the past few days. however, in my opinion the positive move today is a bull trap. The index could be forcing out weak sellers. The doors remain open for a pull back to 7300.
Only a daily close above 7500 would signal the pull back has ended.
Too early to say the pull back is over. The spot is still battling with offers around the trend line resistance.
The short-term outlook remains bearish. The potential for a sell-off to 1.10 will be ruled out only after the spot has closed above 1.1229.
Repeated failure around 100% Fib expansion level + Bearish price RSI divergence, followed by Wednesday’s gravestone doji candle and a bearish follow through today suggests the spot has topped out at least for the short-run and could test the psychological level of 1.10 levels over the next few days.
Rebound form the rising trend line if followed by a break above 141.58 (23.6% Fib) would add credence to the bullish MACD divergence on the daily chart and signal trend reversal. The cross could then proceed to 144.00 levels.
H&S breakdown looks like a done deal...is preceded by a bearish price RSI divergence and falling tops pattern.
The index ha topped out for the short-term and could extend losses to 7300 once the support at 7354 is breached.
The macro side of the story looks weak as well - Pound rallying, BOE tilting towards rate hike + political uncertainty
The pair is extremely overbought…trading above 8/8 Murrey Line. However, the RSI shows room for rally.
Hence, a daily close above 1.1285 (recent high) would open doors for a rally to 1.1366-1.14 levels.
On the other hand, a break below 1.1166 would add credence to the turn lower from the overbought line and could yield a sell-off to 1.10 levels.
The sharp retreat from the high of 110.34 on the back of weak US retail sales and inflation data has kept intact the falling tops formation on the daily chart.
An end of the day close below 109.11 (June 7 low) would open up upside towards 108.13.
On the higher side, only a daily close above 110.34 would revive short-term bullish view
The follow through to the bearish divergence has been weak and the recovery from the low of 1.1166 to 1.1220 suggests the drop from 1.1285 was nothing more than a pull back, thus the spot could attempt to break above 1.13 again.
On the downside, only an end of the day close below the rising trend line would signal the rally has ended.