The pair had recently been pushed northwards by FX traders. As is typical, the first sign that the pair might be ready to make a move was a trend line break as depicted our chart today.
It should be noted that trend line on the chart is based on a longer-term trend line, and holds some considerable weight by the FX traders involved in this pair.
A couple of weeks ago even seen the first real test of this trend line in the form of an extremely long bearish bar, which was subsequently rejected and countered with an extremely bullish bar the following day as shown by the arrow on the left.
Roughly a week later another attempt at the 112 level was attempted by FX traders. Again, it was rejected this crucial level and reach a similar high to the one that had just been made, as shown by the blue box. This high, roughly at the 116 level, will be the pairs next major hurdle.
While the pair does look like it’s going to hold at 112, in order to continue the uptrend 116 must definitely be taken. Because of the lack of a higher high on the second attempt to take that mark, we could be entering a phase of consolidation for the short term. This would be completely out of the ordinary, as often a trend line break will consolidate for a while before deciding its ultimate direction.
FX traders will certainly be watching both of the above mentioned levels for clues to an upcoming move in this pair. Below you will find our chart: