On the daily chart below, we can see that after breaking above the downward trendline that was keeping the downtrend intact, the price rallied erasing almost all of the February decline. The price is now struggling to extend above the 1.2264 resistance as the uncertainty is high in the markets regarding the future outlook.
The Fed has hiked by 25 bps and kept everything else unchanged, including QT and no rate cuts projected this year even though the market pricing suggested one coming soon. The Fed is still fighting inflation but is worried about the banking sector and this may be bad for risk sentiment going forward if something breaks in the economy.
On the 4 hour chart below, we can see that the price is near the upward trendline that acts as support for this uptrend. The divergence between the price and the MACD signals that we should get a pullback to the trendline or, in case the price breaks below, a bigger selloff with the first target being the support at 1.20 as that’s where the divergence started.
On the 1 hour chart below, we will likely see buyers stepping in on the trendline with defined risk to target the break above the resistance at 1.2335 and higher. Conservative buyers may want to wait for the moving averages to cross upwards again to confirm the bounce and the next leg higher. The sellers, on the other hand, will start to pile in in case the price breaks below the trendline.
