With thin trading yesterday behind us, the lows of the range established during that time have been tested and exceeded on the downside. Price has since moved back up into the trading range between 1.4050 and 1.3955. Low of the range is now 1.3945 after the false breakout.
A break back below the low of 1.3945 would indicate a profit target of 1.3850. A move to this level would break the upward hourly trend line which started on May 18. A move beyond 1.3850 would signal a fuller correction and target 1.3750.
If the rate holds above 1.3900 and ultimately break above 1.4050 another upswing will target 1.4150. The December 30 highs of 1.4200 will provide resistance beyond. Moving past this level is unlikely today with the average daily range hovering around 150 pips. There is little resistance above 1.4200 if rates seek out the volatile highs of December 08.
Through quiet trading yesterday the pair respected a prior swing high of 95.25. A drop below 94.60 would indicate another swing down, but confirmation would be a break of the 94.40 level. The break provides a profit target of 93.85, this corresponds to swing lows of May 22. The 93.50 level is significant and likely to provide further support. Beyond this the profit target is 92.50.
A break above resistance at 95.25 would indicate an initial target of 95.85-96.00 and beyond that 96.60.
Forex Trading Analysis written by Cory Mitchell, featured by forexpros.com.
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