Overview:- From starting of this week pair is heading south side as we can see pair is facing supply pressure from strong key resistance level. Well the way pair returned from 1.2668 level it seems like pair is heading south side and the 1.2500 level is last hope for bulls. If pair able to break this level then we may see strong sell off and the 1.2400 and 1.2250 level is not far away. Also, if bears continue the game and hold grip in their hand then below 1.2250 level second phase of bearish storm will start, let’s see whether bears will break it or not but presently pair seems weak and the 1.2400 and 1.2250 are the next arrival of bears below the 1.2500 level.
Today pair arrived at 1.2504 level So here we would suggest our traders that go for sell on every bounce. Momentum is favoring the bears now and it seems like pair has formed a top of 1.2812 from intermediate point of view and other indicators and oscillators are also supporting the bears.
Technical Analysis:- From a technical perspective, we can see on 4 hourly chart an uptrend line has been breached out and presently pair is trading in purely downtrend channel where purely balanced demand & supply is going on. However we will get further bearish confirmation once pair trades and settles below the 1.2500 level on hourly basis and then the 1.2400 and 1.2250 level seems as soft target for bears. On contrary a daily closing above 1.2580 level will change the outlook from bearish to bullish and then pair may go up to test the 1.2650 and 1.2750 level however the chances are very less for this event.
Odds are in favor of bears we will keep our view bearish as long as 1.2600 level remains intact on positional basis..Overall the pair is trading below all the major and minor EMA lines which are supporting the bears. The RSI is seems negative on the Daily as well as 4 hourly chart and a bearish crossover on MACD is also the favoring the bears on 4 hourly chart which is a recent development.
What next:- The 1.2550 level is immediate resistance level followed by 1.2650 whereas 1.2300 level is strong key support level followed by 1.2200 level.
Trade idea:- Based on chart and studies above we can suggest that sell the pair below 1.2500 for the target of 1.2400 and 1.2250 with tight stop loss of 1.2650.
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