Both bullish & bearish flag pattern occurred, the current prices are well above SMAs but no momentum is observed (4H chart).
For now, bearish flag pattern is visible on 4H chart, it is now attempting to break below a strong support exactly at 7DMA levels, and the breach below would likely to test next strong support at 1.1630 levels.
While in a broader perspective, the upswings in the major trend likely to head towards above range resistance of 1.16 levels (see monthly chart) despite bearish swings for the day with a gravestone doji formation as the dips likely to extend as previous uptrend momentum is shrinking away.
More rallies on cards to hit 2 years highs 1.1714 levels (just 60 pips away from current levels) as long term trend backed by both momentum and trend oscillators.
On this plotting, 7EMA likely to cross over 21EMA which is the bullish crossover, the current prices have also gone beyond EMAs and sensing healthy bullish momentum we foresee northwards journey upto next stiff resistance at 1.1875 levels.
To substantiate this bullish stance, MACD, on the other hand, signals the extension of the bullish trend (refer monthly charts).
On the contrary, momentary dips should not be disregarded as you could observe overbought sentiments are signaled by the stochastic oscillator. This leading oscillator has entered 80 level which is overbought trajectory but no traces of clear bullish crossover. While RSI has also shown signaled the losing strength in rallies at the overbought trajectory.
Trade tips:
Contemplating technical reasoning, on hedging grounds, it is advisable to go long in futures contracts of mid-month tenors.
This long position should be entered in with a view to arresting upside risks upto 1.1875 levels keeping a strict stop loss of 1.15.
Currency Strength Index: FxWirePro's hourly EUR spot index has turned into 44 (which is mildly bullish), while hourly USD spot index was at 4 (neutral) at 06:41 GMT. For more details on the index, please refer below weblink:
http://www.fxwirepro.com/currencyindex.
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