The FX Trader’s view –
In early June a recovery attempt proved short-lived, with a new downtrend low made at the start of August. This was just above a long term 61.8% retracement level and support is emerging here. It is worth considering recovery possibilities now.
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WEEKLY CHART: The Jun/Jul bounce found clear resistance from near the 1.1759 Jan low.
Subsequent weakness has found support just above the 1.0585 61.8% retracement.
In the FX Trading Guide we have pointed out initial evidence of a positive divergence on the weekly RSI – are bears tiring? -
DAILY CHART:
So far, the breach of the 1.0782 01-Jun low has proved short-lived.
Initial resistance has come from around a 38.2% bounce level –also note the 23.6% level of the whole 1.3063/1.0630 decline just above 1.1200.
A recovery through this would be s/term positive, and at least enough to put bears on the sidelines.
Ultimately a further recovery above the 1.1465 76.4% level would be needed to strongly suggest that a medium term recovery phase was underway.
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