After the invalidation of the double top scenario, price was primed to make yet another attempt towards 100.0. However, instead of being third time lucky, this third attempt limp out weekly, unable to even touch 99.5 before bears took over and press lower towards 98.5, looking likely to form a new top which will increase in probability should price break below 98.5 and move towards 97.0.
Stochastic indicator is showing an interim trough right now with Stoch and Signal line crossing while pointing lower. This add on to the possibility that price may be able to break 98.5, and is likely to move towards 97.0 at least given the space between current levels and the Oversold region. The 2 Doji candles that has been formed with body around 99.0 suggest that price is currently topping, with yesterday’s bearish engulfing piling more pressure to push price lower.
Short-term chart shows price steadily climbing down with Stoch readings interesting looking likely to form a trough despite only halfway towards 98.50 and Channel bottom. Price is currently sitting around the 50% line of the NFP rally (see long bullish candle on the left of chart), which is acting as an interim support. Should stochastic signal proved to be true, there is a likelihood where price may be able to bounce from here to test Channel Top. A move like this would not negate current bearish pressure especially if price manage to stay within channel, as the sequence of lower lows and lower highs would not be broken, with the possibility of a move below 98.7 remaining open.
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