Downtrend from 114.49 (11 July high) showed initial signs of stall after Monday’s trading was shaped in long-legged Doji candle and closed above strong support at 110.97 (Fibo 61.8% of 108.80/114/94 rally) after dipping to 110.62. Also, base of daily cloud (spanned between 110.74 and 111.23) contained Monday’s dip, reinforcing strong support zone which is holding broader bears for now. Fresh strength on Tuesday is attempting above daily cloud, with strong bullish close today needed to complete reversal pattern (Morning Doji Star) and signal correction. Slow stochastic is turning higher in oversold zone on daily chart (bullish divergence has also been formed) and supports scenario. However, limited upticks are seen as strong resistance zone lies between 111.65 and 112.10 (formed by a number of daily SMA’s in bearish setup). Key barrier at 112.10 also marks Fibo 38.2% retracement of 114.49/110.62 fall and weekly cloud top, break of which is expected to cap extended upticks before bears resume for final attack at psychological 110.00 support. Conversely, sustained break above 112.10 would generate stronger bullish signal and sideline bears for stronger correction.
Res: 111.65, 111.80, 112.10, 112.63
Sup: 110.97, 110.79, 110.62, 110.23