Weekly bias remains bearish. List of indicators applied on the 4 hours time-frame used for analysis includes:
Moving Averages 21 and 55 = Sell
Parabolic S.A.R = Sell
R.S.I = Sell
MACD = Sell
SSRC(customized stochastic) = Sell
Weekly Central Pivot Point Bias = Bearish
Candlestick formed from previous week = Bearish ( confirmation of a rejection of 21 EMA on the weekly time-frame resulting into an engulf pattern)
The sharp decline from this pair last week suggests that rebound from 1.4950 has completed at 1.5550 after hitting mentioned 38.2% retracement of 1.6523 to 1.4950 at 1.5550. The down trend from 1.7190 (July 2014’s high) is ready to resume. Initial bias remains on the downside this week for 1.4950 support first. A break and close of this support will confirm this bearish case and target 1.4813 support next. On the upside, above 1.5215 minor resistance will delay the bearish case and bring consolidations first as the market looks over-sold.
Selling the rips could be a profitable method trading this pair.
In the week ahead, markets will be watching Thursday’s U.S. retail sales report for further indications on the strength of the recovery, while Wednesday’s report on U.K. Manufacturing Production will also be in focus.