traded lower on Thursday, after it hit resistance fractionally above the 128.40 barrier, marked by the inside swing low of the 30th of November, on Wednesday. That said, the slide was stopped once again by the 127.65 barrier, which is the lower end of the sideways range that’s been containing the price action since the 9th of November. Bearing in mind that the pair continues to trade within that range, we will adopt a neutral stance for now.
However, given that the rate is also trading near the lower end of the range, we see more chances for a downside exit rather than an upside one. If the bears prove strong enough to overcome the 127.65 hurdle soon, then we may see them driving the battle towards our next support of 127.25, defined by the low of the 29th of October. Another dip below 127.25 could carry more bearish implications, perhaps opening the way for the low of the 26th of that month, at around 126.65.
Shifting attention to our short-term oscillators, we see that the RSI, already below 50, has turned down, while the MACD lies within its negative territory and has just touched its toe below its trigger line. These indicators detect negative momentum and support our view that a downside exit out of the range is more likely than an upside one.
Now, in case we see a rebound above 128.40, we would take it as a signal that traders want to keep the pair within the range for a while more. We could then see a recovery towards the 129.05 level, the break of which could aim for the upper bound of the sideways range, at around 129.30.