This week, the pair is trading within the monthly CZ, which indicates a high probability of price retention within it and beyond. There was a test of a significant resistance zone yesterday, which led to the formation of a reversal pattern.
Today's decline in the pair should be perceived as a correction. Yesterday's US session closed above the 1/2 CZ of 111.14-111.05.To resume growth, it may require a better price. The defining support will be the 1/2 CZ of 110.53-110.45. While the pair is trading above this zone, the upward movement remains a priority. The goal of growth is the weekly CZ of 112.12-111.95 and achieving this zone will allow fixing most of the purchases.
The probability of growth is also confirmed on the higher timeframe, where the pair is testing the lower monthly CP. While the month is not closed, the probability of closing below this zone is close to 30%.
An alternative model will be developed if today's closure of the American session happens below 110.45. This will open the way for a decline of the pair and update the December low. It is important to understand that such a model in the future will lead to a return to the limits of a monthly fault with a probability of 90%. For this reason, considering this model for sale is not profitable.
Daily CZ - daily control zone. The area formed by important data from the futures market that change several times a year.
Weekly fault - weekly control zone. The area formed by marks from important futures market which change several times a year.
Monthly fault - monthly control zone. The area is a reflection of the average volatility over the past year.
The material has been provided by InstaForex Company - www.instaforex.com