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The cable on Friday broke below a two-month-old descending trend-channel and the set-up supports prospects for a further near-term downside, in the opinion of Haresh Menghani from FXStreet.

Key quotes

“Any positive move towards the 1.2875-80 region might still be seen as an opportunity to initiate fresh bearish positions.”

“A sustained move above the 1.2875-80 barrier, leading to a subsequent strength beyond the 1.2900 handle might negate the negative outlook and set the stage for a move towards reclaiming the key 1.30 psychological mark. The latter coincides with 50-day SMA and should act as a key pivotal point for the pair’s next leg of a directional move.”

“On the flip side, weakness back below the 1.2800 round-figure mark might continue to find some support near the 1.2775-65 region, which if broken will reaffirm the bearish bias and set the stage for a slide towards challenging the 1.2700 round-figure mark.”