Richard Perry
Independent Analyst
The resistance of the highs around the 23.6% Fibonacci retracement level has pulled the pair back from a bull run towards the outlook of an indecisive trade now. There are several mixed signals on the charts which are rendering this a tough near term call. I have been saying for a few days that I expected a correction back towards the key near term pivot level that has been the 38.2% Fib retracement at 123.20. Now the test of support will really come in. If the bulls are in control then the rebound we have seen overnight will hold and the outlook will remain solid. The Stochastics are on the brink of giving a confirmed sell signal, however the other momentum indicators are still fairly positive. I would look for how the pair reacts to the resistance band around 123.50/123.80 now. Support is currently at 123.00. The intraday hourly chart shows the momentum is quickly unwinding, and if the hourly RSI moves into the high 60s/low 70s then this would suggest the bulls are gaining momentum again. This is still a play that is looking for direction and maybe the FOMC is needed to provide it.
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