- Sterling could break its upward trend
- Euro could fall further
Sterling-Dollar
The sterling-dollar pair has failed to break above the downward trend line (shown in orange) on a daily time frame. This confirms that the price is still in a downward trend and as long as the price stays below this line, the bulls do not stand a chance to win this war. Another confirmation of the downward trend comes from the fact that the price is also trading below the 50-day and 100-day moving averages (shown in green and yellow respectively).
We have two support zones shown on the below chart, one of them is shown the dotted green line and the other one with the solid green line. The price has been bouncing off from the dotted support line however, it may be possible that the next time the price comes and tests this level, it may not hold.
The BOP favours the bears as it is trading in the negative territory. Watch out the trend line on the RSI indicator, if the RSI breaks above this, it will confirm bull momentum.
EURO-Dollar
The euro-dollar pair failed to break the minor resistance zone on a daily time frame. The minor resistance zone is shown by the pink rectangle. The price has already tested this level twice and now it is testing the strength of the downward trend line. This is shown in orange. If the price breaks the downward trend line, it is likely that it may be able to break above the minor resistance zone as well.
In terms of trend, the 50-day moving average is trading below the 100-day moving average and this confirms that the downtrend is in play.
Watch out for the RSI, it is testing the upward line and a break of this will confirm weakness.
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