traded lower on Monday, after hitting resistance slightly below the 70.70 hurdle, which prevented the rate from drifting higher between July 6th and 13th. Overall, since July 2nd, the pair has been trading in a trendless mode, staying mostly supported by the psychological zone of 70.00. Thus, we will stay neutral for now and wait for a decisive dip below that zone before getting confident on larger declines.
A clear and decisive dip below 70.00, or even better, below the low of July 14th, at 69.80, would confirm a forthcoming lower low and may encourage the bears to push towards the low of July 1st, at 69.25. The slide could get stopped near that zone, and the bears may allow the rate to rebound somewhat, but as long as it would be trading below the psychological zone of 70.00, we would see decent chances for another leg south. The 69.25 territory could surrender this time around, and the tumble could get extended towards the 68.70 area, which is marked as a support by the low of June 29th.
Taking a look at our short-term oscillators, we see that the RSI, already below 50, has turned down again, while the MACD lies below both its zero and trigger lines, pointing south as well. Both indicators detect downside speed and increase the chances for the rate to drop below 70.00 at some point soon.
On the upside, a rebound back above 70.70 could pave the way towards the 71.20 mark, the break of which could target the 71.65 zone, defined as a resistance by the highs of June 8th and July 23rd respectively. That said, we would still consider the near-term outlook to be neutral. In order to start examining the bullish case, we would like to see a break above 71.65, as such a move would confirm a forthcoming higher high on both the 4-hour and daily charts.
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