Technical Analysis – EURNOK rallies above previous swings plotting a week of positive sessions

Anthony Charalambous, XM Investment Research Desk

EURNOK climbed fiercely this week taking back the rest of the losses which occurred from the move south that started the fall from the high of 9.8733 on May 10 to the low of 9.5810, including the high of 9.8733. The 20-day and the 40-day simple moving averages (SMAs) are turning and could cross above the 100-day SMA again to rejuvenate the up move.

The momentum indicators confirm the bullish appearance suggested by the pair, as the MACD has crossed above its trigger and zero lines, increasing in the positive zone. The RSI has risen into the overbought region and points up. Moreover, the ADX is showing a strong positive trend in place.

If buying interest persists, price could propel to the 9.9570 resistance, and once surpassed could test the 9.9860 to 9.9900 zone, which is the 138.2% Fibo retracement level of the down leg from 9.8733 – 9.5810. A breach could see prices reaching 10.0550, which is the 161.8% Fibo.

To the downside, if sellers were to take control of the rally, a pullback initially to the 9.8733 support could play out, before the short-term uptrend line around 9.8300 comes into view. Falling lower, the price could slow at 9.8040, which is the 76.4% Fibo, before testing the 61.8% Fibo of 9.7610.

Summarizing, the very short-term bias is bullish, whereas if a pullback were to fall back to the 100-day SMA level, around 9.7000, the medium-term bias would become neutral again.