The pair has heavily respected the key trendline support (white line) from the November and early February lows over the past few months. But sellers are looking to make a play now in pushing below that as we get into what will be a blockbuster week for markets.
For me, I’m not going to be too convinced in chasing a technical break without confirmation of the main events from later this week. So, even with a potential break, buyers are not out of it yet as the dollar could still be set for a turnaround depending on the US CPI and Fed decision in the next few days.
Adding to that of course, there are also still several additional layers of support that sellers need to chew through.
- November low @ 1.3225
- February low @ 1.3262
- April low @ 1.3300
- May low @ 1.3314
That’s roughly a 90 pip layer where buyers can still show some fight to produce a reversal of sorts when push comes to shove this week. So, only if we do shake that off would I be more convinced of a technical breakdown below the 1.3200 mark for the pair.
But again, it all comes down to what the central bank decisions and big data will have to offer this week.