Last week, there was a repeated test of significant long-term support of 1.3054. The increase in demand indicates the interest of large players and the presence of buy limit orders below this level.
Strong reaction to the significant level of support 1.3054, formed in 2017, speaks about the possible formation of a deep correctional model. While the pair is trading above the long-term support level, the probability of forming a medium-term model is more than 50%. This makes it possible to consider corrective purchases in the case of patterning. An important condition is the installation of a stop-loss below the level of 1.3054. This eliminates false withdrawals in the case of the formation of a medium-term flat. The potential profit at purchases from current marks can make 250 points.
If the growth will lead to a breakdown of the monthly July high and the pair will be able to gain a foothold, this will allow holding a part of the long position with a deeper correction. Adjustment for this plan will have to be made at the end of the week.
To continue falling, a breakdown and consolidation below the level of 1.3054 is necessary by the close of trading in one of the coming weeks. This will open the way for a decline to the next support, which is located at the level of 1.2796. It is important to note that the range between 1.3054 and 1.2796 was the accumulation zone last summer, which in the future led to a strong increase from current marks in the first autumn month. This should be taken into account when switching to a new futures contract, which will occur in mid-September.
The daily short-term fault is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.
The weekly short-term fault is the weekly control zone. The zone formed by important futures market marks, which change several times a year.
The monthly short-term fault is the monthly control zone. The zone, which is a reflection of the average volatility over the past year.
The material has been provided by InstaForex Company - www.instaforex.com