I mentioned last time the Area of Congestion based around 1.4350 – 1.4650 and that we had just started to run up into it last month…and then stopped. I also pointed out last time the 'key underpinnings are the old 1.4040 area plus the recent 50% Fib at 1.3898’.
The market agreed with this synopsis and in the past month it decided to initially Bearishly take out the 1.4040 and 1.3898 levels, pull back up and then make sure by pushing down again and this time crashing down and through the key Nov 2017-to-date Uptrend (currently 1.3776). So far we’ve had only one close below but we may be on for a second one today.
Why do this? Because when we were testing the noted overhead Congestion mentioned earlier, we’d made a Double Top with a Target about 1.3675. What is especially interesting about that level is the coincidence with the 50% Fib at 1.3683 of the key recent Oct 2017 – Jan 2018 move.
It would seem that we may see a try to these levels and that it may try to exhaust the market trying to go further lower…we’ll wait and see. Just in case prices do follow through lower…or just in case we do turn around and back up.
There’s a Bearish Channel formed since Jan with support currently at 1.3592 and resistance at 1.4032. Both these levels are interesting as below we have the rapidly advancing Medium MA (currently 1.3550) support whilst the Upper Channel is in fact a Four-Point Downtrend and therefore ought to be reasonably solid.
With all this in mind and plus Short MA turning down, I’ve decided to move the bullet point into mildly Bullish from fully Bullish. Currently Neutral would be consecutive closes below the nearby Medium MA whilst Bearish would be the same below the Long MA (currently 1.3291).
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