has been trading in a small sideways range since last Tuesday, between the 1.1860 support and the 1.1927 resistance. Although this keeps the very short-term bias neutral, the fact that the rate continues to trade above the prior downside resistance line drawn from the high of Feb. 25, makes us believe that there are more chances for the rate to break the range through its upper boundary, rather than its lower. Thus, we will adopt a cautiously positive stance for now.
A break above the upper end of the range, at 1.1927, or even better, above 1.1945, which is the high of Mar. 22, may encourage the bulls to drive the battle higher, towards the 1.1990 zone, which provided strong resistance on Mar. 11 and 18. That barrier was also seen as a support back on Mar. 2. If that zone is not able to stop the bulls this time around, its break may set the stage for extensions towards the 1.2055 hurdle, marked as a resistance by an intraday swing high formed on Mar. 4.
Shifting attention to our short-term oscillators, we see that the RSI lies above 50 and has recently turned up again. The MACD, although below its trigger line, runs within its positive zone and shows signs that it could also turn up soon. Both indicators suggest that the rate may start picking up positive momentum soon, which adds more credence to our view that the pair is more likely to exit its recent range through its upper bound.
Now, in case the bears take charge and push the action below the range’s lower end, at 1.1860, we may see them initially aiming for the high of Apr. 5, at 1.1823, or the low of the day after, at around 1.1795. If neither barrier is strong enough to stop the decline, then we may experience extensions towards the low of Apr. 5, at around 1.1737.
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