On the daily chart below, we can see that after the strong US PMIs the price has broken the key 1920 support level that was previously a strong resistance for the buyers.
The moving averages have now crossed to the downside signalling a change in trend. The price has been consolidating just below the 1920 level as the market probably awaits the key economic data in March to see if February was just a blip or a real reacceleration in economic activity and inflation due to the easing in financial conditions.
In the 4 hour chart below, we can see that the price has erased the losses seen after the hot US PCE report last Friday. It may be a sign that the market wants more data to confirm the change in the expectations and archive the current talks of seasonal factors skewing the data.
A retest of the 1920 level may be in the cards and that will be the last line of defence for the sellers, while a breakout to the upside may give the buyers some conviction to target the swing level at 1960, but such scenario looks unlikely unless the economic data miss expectations.
In the 1 hour chart, we can see that the divergence between the price and the MACD was signalling a weakening selling momentum which ultimately led to the current pullback.
There are two possible spots where the sellers may start piling in. The first one is the trendline and the second one is the 1920 resistance. Given the data, it’s unlikely to see the price breaking up the 1920 level with conviction, so the sellers should remain in control going forward.
