Overview:- By analyzing the daily chart we can see that a massive bullish storm in the pair where bulls are making successively higher highs and higher lows on daily as well as weekly basis. Overall pair is trading at 7 week’s fresh high and missed 8 week’s fresh high by a very small margin. Good thing is that we already mentioned in our previous report as well as in our blog that pair has bottomed out and we advised to buy at 1.2000 level for the target of 1.2500 with the small stop loss of 1.1800, and our target has been achieved easily, we are expecting that our readers must have made profit from this move.
Short term trend has been changed from downside to upside and this will continue as long as pair is trading and sustaining above the 1.2250 level.
Technical Analysis:- From technical prospective we can see that a rounding bottom pattern is in process of formation where very balanced demand and supply is going on and it will complete the pattern at 1.2800 level which is bare minimum approachable target by bulls. A bullish marabuzo candlestick on the daily chart and a hammer candlestick followed by a bullish marabuzo candlestick on the weekly chart is generating further bullish signal and it seems like it is just a starting further picture is still awaited. Downside risk is not over yet we will get further bullish confirmation once pair trades and settles above 1.2500, a daily closing above 1.2500 level will open the way towards the 1.2750 and furthermore. however there are high chances that we may see buying till that level without any hurdle. A bullish divergence on the RSI is supporting the trend reversal signal and a bullish crossover on the MACD indicator occurred which is providing strength to the bulls.
What next:- Overall pair is trading and moving above the moving average (9,14,50 EMA) lines and now bulls are approaching the 200 SMA line which is key resistance zone for bulls. One more bullish signal can be observed on the monthly chart that a rickshaw man doji candlestick price pattern has been formed which is generating trend reversal signal on monthly basis.
Trade idea:- Based on chart and studies above we can suggest that buy pair at current levels i.e. 1.2460-1.2450 target is 1.2700 and 1.2850 sl is 1.2250 level. The 1.2700 level is immediate resistance level followed by 1.2880 whereas 1.2250 level is strong key support level followed by 1.2000 level.
