Overview:- By looking at the daily chart we can see that overall pair is heading downside with strong bearish sentiments and it is moving clearly in downtrend but after arriving at 1.0925 level we have seen some response from bulls and bulls took the pair to 1.1109 and then again bears took the charge and pair fall down to 1.1004 level at the time of writing. Well pair has fallen too much and now it has arrived at key support levels on monthly as well weekly chart so in coming days we may see some reversal candlesticks.
In our past reports we have mentioned to short the pair around 1.1350 for the target of 1.1100 with the stop loss of 1.1420, we are expecting that our readers must have made profit from this move.
Technical prospective:- 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 even we may see roller coaster rides are there where, bulls takes the charges one day and very next day bears took the charge so we can say that tug of war is going on, however there are high chances that we may see strong upside momentum.
The gan lines shows different folds of the trend and presently market is trying to shift from 1*2 fold to 1*1 fold, if it happens then market will move up with bullish sentiments and the possibility of rounding bottom will occur easily. Shift from one fold to second fold which indicates that momentum of downfall has become slow but we will get reversal signal once pair trades and sustains in the 4th flow of the gan lines. Odds are in favor of bulls and our bias remains bullish on the pair as long as 1.0925 level remains intact, as we know that primary trend is down and secondary trend is also down but we are witnessing some trend reversal signals at bottom. A bullish crossover on MACD indicator is favoring the bulls and providing us bullish signal for the time being. RSI arrived in the positive territory, which is supporting the bulls.
What next:- The long term traders are advised to go for long at any reversal on daily chart because the downside risk is not that much there are high chances that for upside momentum which will be a good risk and reward ratio. Overall pair is trading between the moving average line which is generating neutral to bullish signal on daily basis from short term prospective. The pair could face the next support at 1.0925 ahead of 1.0900. On the upside, resistances align at 1.1160 and 1.1200.
Trade idea:- Based on chart and studies above we can suggest that buy the pair at 1.0980 for the target of 1.1100 and 1.1250 with the tight stop loss of 1.0900.
