The value of emerging currency peso appreciated as much as 6.00% to 19.00, its highest level since August 2019 before closing at 19.12.
- Approaching interesting support here at 19.00-18.75
- Focus on a fairy thick congestion area
- Consider buying if reached support zone
The cross may fall into a range of 19.00-18.90 identified as the A-B-C corrective structure from the end of Aug 2019. However, the corrective wave pattern suggests that the cross is in the final wave of correction, and a bounce may start from 19.00-18.75 range. It broke below parallel support at 19.31 and its 200MA as well, suggesting a move to 19.00-18.75 we could find a meaningful bottom.
Turning to daily indicators, the relative strength index (RSI) is recovering from 30 equilibrium levels, implying that the cross is oversold and about to change the direction. On top of this, the oscillator has been remaining bullish, which is supporting our fresh bounce. A decisive breakout above 19.20 could allow the price to price to bounce toward the key resistance at 19.30, which was earlier support level ahead of 19.50.
Whereas breaking below the support level 18.74 would increase the chances of continuing down towards 18.50-18.40. its 61.8 fib reaction (17.44-20.95 rally) and 18.20 its 78.6 fibs.
The higher time frame still suggests the cross might fall further.
View: Watch how price action develops around 19.00-18.90. Break lower opens the potential for 18.75. Consider buying if reached with sl around 18.40
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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