By: Colin Jessup
There could be a reversal in the works on the UERCAD pair. Today's daily candle is a 174 pip bullish engulfing candle formed off of support at 1.3475. Price last reached this level around the middle of July and proceeded to move up to a high of 1.4309 within a month. Now, another month has passed and we find ourselves at the same strong support level and price reacts by turning bullish almost immediately. We are also close to an ascending trend-line acting as support going back to June 2010.
Price is potentially going to push upwards towards resistance at 1.3750 and 1.3875 after that...if price falls we will need to clear below support at 1.3475 and then 1.3335 and longer term, could see 1.3140 which would be the 38.2% extension level. Also of interest is that if we break to the downside, there is a fairly open technical vacuum below 1.3404 and could pull price down rather rapidly if this support level is breached. I remain bullish on this pair for the short term however, and will be trading in that direction if we break above 1.3640.
Happy Trading!