On the daily chart below, we can see that the price is getting closer to the neckline at 1.1839 of the possible double top at 1.2444. Generally, when there’s a clear divergence between the double top and the MACD, the pattern is more reliable.
The moving averages are clearly pointing to the downside, and the fundamentals in February switched in favour of the USD due to many key economic indicators like jobs and inflation surprising to the upside.
We can also notice that the price action coming into the neckline has been tentative and this may be due to the uncertainty of the market regarding the February data. The market may be awaiting March data to confirm the change in trend before breaking lower.
On the 4 hour chart below, we can see that the market is basically ranging with a bearish tilt. In fact, the moving averages have crossed up and down multiple times and the divergence between the price and the MACD is signalling a loss of selling momentum.
In such instances, it’s better to wait for some fundamental catalyst before taking a position as one can be chopped out in a rangebound market. This week there are the ISM PMIs that may act as catalysts. Data above expectations should be bearish for the pair and vice versa in case the data miss forecasts.
On the 1 hour chart below, we can see that at the moment the price was rejected from the 1.2057 level. It looks like a level of interest to the market as the price reacted to it previously.
If we take the Fibonacci retracement tool and measure the previous move down, we can also see that the price has reacted to the 61.8% level. The sellers may already start to pile in here. The last line of defence for the sellers will be the trendline.