By Mohammed Isah of fxtechstrategy.com
: The pair was seen weakening in early trading today, reversing its Monday gains and targeting lower prices.
We expect the pair to go even lower, initially toward 1.4500. A loss there would open the door for more downside pressure towards the Oct 2 low at 1.4479 or even lower.
The current price action has halted the pair's medium-term pattern of higher highs and higher lows and increased the risk of a deeper price retracement. The pair's weekly relative strength index is bearish and trending lower, supporting this view.
A failure to hold below 1.4625, if seen, will turn the focus to the upside toward the 1.4799 level, the Nov. 20 high, where a reversal of roles is expected to turn it back down again. If that fails, we may see the pair climb higher toward the 1.4949 level, the back of the invalidated long-term rising trend line. Beyond there, the pair could make a run at the 1.5143 level, Its year-to-date high.
Overall, with the 1.4625 level violated and a hold below it seen, further downside weakness is likely to continue towards the 1.4481 level.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.