The market is still forming the right shoulder of our proposed head and shoulders top pattern; while the pair stabilized above SMA 50 and we need to witness a four hour closing below 112.85-112.80-the value of SMA 50- to activate the awaited bearishness of this reversal pattern. We can see that the aforementioned pattern is still under formation and that is why we need this breakout. At the same time, RSI 14 is very close to overbought areas, indicating that the pair is on its way to gather the momentum it needs to revisit the neckline areas round 112.10 zones.
The trading range for today is among key support at 111.60 and key resistance now at 115.40.
The general trend over short term basis is to the downside, targeting 97.90 as far as areas of 132.50 remain intact.
|Recommendation||Based on the charts and explanations above our opinion is, selling the pair with a breakout below 112.80 targeting 110.90 and stop loss above 114.35 might be appropriate.|