4 Hourly Chart
Price has cleared 1.24 level and appears to be heading towards the top end of the trading range of 1.24 – 1.2485. Stochastic reading seem to agree, with readings bouncing off lows around 20.0 with a fair distance away from the Overbought region suggesting room for price to rally before another bear cycle starts.
However, if we were to use 1.242 as the critical support/resistance level, we would still consider current trend to be bearish, with price carving out a recent low with the recovery pullback not able to test the 1.242 line. At best, current levels is within the consolidation range of 1.24-1.242, and not suggesting a bullish recovery.
Weekly chart does not really give us any clearer insights other than reconfirming the importance of both 1.242 (purple line), and 1.24 (grid-line) as there are evidences of its historical significances. 1.242 is the bottom back in Feb ’12 and the top back in Dec ’12, while 1.24 is looks to be the structural support back in Oct ’11 and between Jun – Aug ’12. Stochastic readings via the weekly chart could potentially peak soon, suggesting price could potentially head lower soon. However, the latest peak was actually higher. If we were to use that peak in Sep ’12 as guidance, we can expect price to hit at around 1.25 to have Stoch readings becoming equally high.
Bottomline: Though price does look heavy, both longer and shorter timeframes are showing mixed signals. Traders may be well-served to wait for further confirmation on either side before committing heavily to a bullish/bearish bias.
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