Looking at weekly chart, we will notice that as a result of lasting since November last year growth market has fallen below downward trend line and has reached 89.00, where in second half of December there was a supply reaction. Since then, we have observed slow declines that reached the aforementioned downward trend line, where bulls reacted after the rebound. After several weeks of consolidation, we see dynamic growth lasting already three weeks.
Looking at daily chart, we note that as a result of these gains market has overcome local resistance at 84.50.
It is worth noting that this level now coincides with measurements:
- 38.2% of Fibonacci correction from the entire upward movement,
- 61.8% Fibonacci correction from the last growth impulse.
Yesterday a strong supply reaction occurred, and as long as declines will continue, in near future we expect a re-test of this zone. Occurrence of demand response and its permanent rejection could signal continuation of growth. If this happens, pair could reach even 89.00 level (see the weekly chart) which gives a potential range of up to 450 pips.
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