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We remained neutral for the moment during the previous technical report due to the conflicting technical signals, explaining that activating the selling positions depends on the pair’s failure to break through the psychological barrier of 1.0600 resistance, heading to touch the first official target of 1.0500, recording its lowest level of 1.0463 during the morning trading period of the current session.
Technically, and with a closer look at the 4-hour time frame chart, we find that the pair failed to maintain stability above the broken support of 1.0550 with the continued negative pressure coming from the simple moving averages.
From here, with the stability of intraday trading below 1.0550 and, in general, below the resistance of the psychological barrier 1.0600, the downward trend is the most preferable, towards the second target of the previous report at 1.0430/1.0420, Sneaking below the mentioned level increases and accelerates the strength of the daily downward trend, opening the door to visit 1.0380 and losses may extend later towards 1.0350.
The price’s consolidation and closing of the hourly candle above 1.0550 postpones the chances of a decline but does not eliminate them, and we may witness a retest of 1.0600, noting that crossing upwards to the 1.0600 level will immediately stop the downward trend and the pair will recover temporarily towards 1.0675.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.
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