tumbled on Tuesday, falling below 1.6210, the lower end of a range that had been containing most of the price action since November 14th. In our view, this has turned the short-term bias to the downside.
If the bears are strong enough to stay in the driver’s seat, we may see them challenging the 1.6140 zone soon, which is defined as a support, by the inside swing highs of November 12th and 13th. If they manage to overcome that obstacle, then we may experience extensions towards the 1.6070 area, marked by an intraday swing low formed on November 13th, and also slightly above the same day’s low. If that level is not able to halt the slide either, then its break may allow extensions towards the psychological zone of 1.6000.
Looking at our short-term oscillators, we see that the RSI lies below 50 and points south, while the MACD stands below both its zero and trigger lines, pointing down as well. Both indicators detect downside speed, which supports the case for some further declines in this exchange rate.
On the upside, we would like to see a clear break back above 1.6315, the upper end of the aforementioned range, before we start examining whether the bulls have gained the upper hand. Such a move may initially pave the way towards the 1.6350 barrier, which if broken, may set the stage for the advance to continue towards the 1.6400 zone, marked by the high of October 17th.
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