The declines of this pair have consistently been remained below SMAs on weekly terms, expect more slumps as no traces of recoveries are observed.
After 5 consecutive weeks of price declines, today slight price jumps should not be deemed as the reversals, we see no reasonable substantiations from any other technical indicators, so don’t get bull trapped as the bears may extend slumps.
As the pair has now slid below EMAs again, we see bears lining up at this level ahead of this week’s RBA’s monetary policy minutes and unemployment claims from Australian side and UK’s CPI, claimant count change and retail sales.
While both leading and lagging indicators are suggestive of bearish trend continuation.
The stochastic oscillator has reached oversold region and still been popping up with selling pressures on both weekly and monthly plotting, the attempts of %K crossover are not convincing while RSI is slightly bears’ favor.
Although price bounces above, MACD with bearish crossover has remained below zero levels on weekly chart which is bearish trajectory, so the major downtrend likely to prolong.
On a broader perspective, the pair has now created a new bearish environment as it has consistently remained below 21-month exponential moving averages from the last couple of months or so.
The pair also breaks strong support at 1.6090 in major bear trend, more slumps likely upon sustenance below.
Bears can load weights in short as selling momentum is intensified by leading oscillators with mammoth volumes.
While no deviation from monthly MACD, the lagging indicator also confirms the downtrend continuation.
Hence, we expect the multi-months lows to extend below 1.5840 levels in the weeks to come.
So it is advisable to stay short in mid-month futures contracts for the 1st target of 1.5840 which is next strong support and upon breach of this level once can also look forward to the 2nd target at 1.5643 by expiration but strict stop loss should be maintained at 1.6258 levels.
