Technical Analysis – EURNOK bulls attempt another push above 2018 high

Anthony Charalambous, XM Investment Research Desk

EURNOK printed a new high of 10.0947 on August 7, but the bears took control and denied the two-week aggressive rally further gains, pulling the pair into a three-week sideways move. The simple moving averages (SMAs) are reflecting that more positive gains are likely to unfold, especially as the bulls take another go at climbing above the 2018 high of 10.0550, finding support from the 21-day SMA.

The momentum indicators agree with the positive directional outlook. The MACD although below its red trigger line is in the positive region and looks as though it may break above its trigger. The RSI is rising in the bullish region and heads for the 70 level.

If the bulls manage to close above the 2018 high of 10.0550, the recent new high of 10.0947 could stall the move up. Given that the buying interest persists and fractures the 10.0947 level, the focus would then turn to the 10.1685 resistance level.

If the 10.0550 resistance holds and the selling picks up, the pairs’ drop could stall around the 9.9914 before testing 9.9734, which is the 23.6% Fibonacci retracement level of the up leg from 9.5810 to 10.0947, and where the 21-day SMA also resides. Moving lower, support could come from the 38.2% Fibo of 9.8985, before the inside peaks of 9.8780 and 9.8285, the latter located just below the 50.0% Fibo of 9.8383.

Overall, the signals suggest the short-term bullish bias could remain in play. That said, a close below the 9.7080 level would return the medium-term outlook back to neutral.