This pair has been bullish for about a year but in Nov. it found resistance at 115.40 . The sellers came in strong and managed to push price down to about 112.70. The bulls came back again and even managed to break above the resistance zone around 115.40 . But there was not much momentum behind this move and price fell below the zone creating a new (higher) low at 113.47. Since then, the battle between the bulls and bears continues – we have another higher low while the zone around 115.40 continues to hold as the ceiling.
So, what do we expect next week? It is likely that the battle will continue and either side can win. My bias is towards the bullish side especially if the sequence of higher lows continues. The path I have drawn is an ideal scenario and if PA next week shows that we are slowly squeezing to the upside, I will feel strongly bullish . Taking a long trade close to the top of the zone is an option, while waiting for a clear strong break and a retest can also provide another opportunity to go long.
Will it play out this way? I have no idea. I am not in the business of predicting what will happen. Monitoring price action, interpreting it and making a plan to benefit from what actually happens is every trader’s goal. If we start seeing serious bearish PA and break of current structure, I will develop a plan for going short. However, as things stand, I am bullish .
How long before the situation becomes clearer? I don’t know, it could take several weeks to develop. My suggestion would be to keep this pair on your watch list and monitor what happens on the daily time frame.
