- January 16, 2020
- Posted by: cabana-admin
- Category: Forex Broker
Overview: – Well pair is falling down consistently from last couple of weeks and it slipped from 1.0002 and yesterday it marked a low of 0.9629 level.. We can see the bearish sentiments and pair is heading towards south side. Well the way bears are reacting it seems like they are approaching the 0.9500 level once again in near term. Overall bears are leading and taking the charge with full of bearish momentum or we can say that bears are driving the car and heading towards south side.
Fundamentally pair slipped after the United States decided to add Switzerland into its list of currency manipulators. Although the Swiss National Bank capped the CHF’s gains by explaining that currency interventions were purely motivated by the monetary policy to disregard the labeling of “manipulator,” the broad-based USD weakness caused the pair to extend its losses. Before the US and China sign the phase-one trade deal later in the day, the US Dollar Index lost its traction and broke below the tight range, in which it has been fluctuating start of the week. As of writing, the index was at its lowest level since January 8th at 97.25, down 0.14% on the day. The strong performance of European currencies such as the EUR seems to be making it difficult for the greenback to find demand.
Technical Analysis:- From technical prospective we can see that pair has breached out all the moving average and sustaining below the lines. A downtrend line has been lying and pair is trading below the downtrend line. Odds are in favor of bears and intraday bias remains bearish on the pair as long as 0.9800 level remains intact.
Well there was a fabulous selling from 1.0000 level to 0.9629 level and there is no hope for bulls. It’s just a starting further selling is still awaited and we may see panic selling once again if bears are able to break the 0.9600 level and provides daily closing below this level then we may see strong selling. RSI is entering in the oversold territory so we may see some correction but that should be another opportunity to sell again which is also favoring the bears and suggesting that bears may lead further. A bearish crossover on the MACD indicator occurred which indicates that now bears will play at the front foot again and will dominate the bulls.
What next :- The 0.9700 is key resistance level followed by 0.9800 level whereas 0.9570 level which is a key support level followed by 0.9500 level.
Trade idea:- Based on the chart and study above we can suggest go for short at current levels 0.9650-60 for the target of 0.9600 and 0.9550 stop loss is 0.9700.