On the daily chart below, we can
see that the price is now clearly in an uptrend after breaking out of the
falling channel. The ultimate target should be the 142.17 level, but it’s still
too early to know if that’s going to be reached.
As of now, the price broke
another resistance at 134.50 although it’s finding
a bit of struggle rallying decisively away from it. The moving
averages are clearly pointing north, and they should offer support for the price as it goes further
up.
On the 4 hour chart below, we can
see that there’s a divergence between the price and the MACD as the price tries to rally away
from the 135.50 resistance. This is a signal of a loss of momentum and
generally we get a pullback before the trend resumes.
Although it looks unlikely that
we will see such a big retracement, the strongest support zone is near the
133.00 handle where we have the confluence of the 38.2% Fibonacci
retracement level, the previous swing point and the trendline.
Sellers will need to break that
strong zone in order to switch the bullish bias into a bearish bias.
On the 1 hour chart below, we can
see the near term price action and given that yesterday we had hot
US PMI data and US Treasury yields are rallying, it’s more likely that we will
get the rally towards the 136.00 level rather than the big pullback to 133.00.
The break of the blue
counter-trend trendline should give the buyers conviction to target one of the Fibonacci
extension levels, with the 161.8% having more chances as the round psychological
number should be more attractive.