Bulls attempted to hold above 1,400 for the past 3 weeks but has failed in all 3 attempts, with price unable to even test the descending Channel Bottom in any manner before retracing back below 1,400. Price started brightly this week, moving up towards 1,389 but ultimately was rebuffed twice (see hourly chart below). Current pressure remains firmly on the downside with price breaking the previous weekly low of 1,375, opening the doors for a possible acceleration lower. Price is also currently trading below the lows of 2 weeks ago, which will add further bearish winds to aid current movement lower. Stochastic is less bearish though, with readings staying just above the Oversold region. However, an alternate interpretation is that current leg of stoch bull cycle is unable to take flight, meaning that overall bearish pressure is high.
Currently, possible downside targets will be the lows from the week of 19th May and subsequently week of 14th April. A break of this level will usher in potential quicker declines as an extension of the descending Channel breakout that has been in play since week of 7th April will be possible, negating current bullish corrective pressure and put bears firmly back in the driving seat, with 1,200 in sight.
It is also worth noting that CFTC Commitment of Traders report released last Friday showed a slight increase in Net Long positions for non-commercials, breaking the sequence of 6 consecutive weeks of decreasing Net Long positions. This should mean that price would increase, but that is certainly not visible based on price last week and this (COT data is 1 week lagging). Noting that Open Interest has also decreased significantly for the past 2 weeks, perhaps a case can be made that the overall bearish sentiment is strong, and the past 3 weeks attempt to cross 1,400 are certainly not sustainable, which opens the door for a stronger bearish reaction this week.
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