Yesterday pair has made a perfect counterattack and bounce from the 1.3140 level to 1. 3330 level which is a sign of positivity. Well, the way bulls are reacting it seems like they are heading to the north side and further bullish momentum is on the cards. Presently pair is trading above all the major and minor EMA lines and the way bulls are reacting it seems like they are heading to the upside at least 1.3400 and 1.3500 level. The sentiments have been changed from bearish to bullish and our bias remains bullish on the pair as long as 1.3150 level remains intact.
Fundamental analysis- Negotiations in the US Congress over a new stimulus package were no closer to completion but nor were they suspended as Democratic House Speaker Nancy Pelosi’s 48-hour deadline came and went without remark.
Wholesale Sales in August rose 0.3% down from July’s 4.3% gain. The May-through-August rebound of 29.1% has surpassed the March and April decrease of 23.8%.US data was limited but generally better than forecast headlined by a surprise drop in jobless claims.
Technical Analysis- A bullish flag pattern has been posted on the hourly chart which is providing us a bullish signal and a short-term uptrend line is also lying on the chart which is providing us a bullish signal. The further upside momentum will be there above 1.3330 level. A daily closing above this level will open the way towards the 1.3390 and 1.3440 level. The overall pair is trading above all the major and minor EMA lines. We even announce that the pair has bottomed out if we get a daily closing above the 1.3400 level. The 1.3400 is the key resistance level followed by 1.3500 level whereas 1.3150 is a key support level followed by 1.3000 level.
Trade idea- Based on the chart and studies above we would recommend for traders and investors that go for long at 1.3300 for the target of 1.3350 and 1.3400 with the stop loss of 1.3200.
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