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This is a pair that could be very bullish going in the future. Recently we broke out of an Ascending triangle we broke out which signalled a move upto 1.63. We pulled back and retested the previous resistance with a perfect hammer on the weekly chart and shot back up. Because of this we feel we are going back to 1.63 again. Interestingly we had a shooting star in the weekly chart and that looks like we are going to stay in this consolidation and we had a hammer after that and that looks like we are going to consolidate higher. Looks like the markets are in confusion and do not know where to go. We are going to consolidate between 1.63 and 1.61 levels. Looking from the daily chart we had a shooting star.
Personally I feel this is a pullback waiting to happen and not a trend change. You could have easily bought the breakout of the 1.63 level and you would be very upset by now. On the Fundamental side we had the Fiscal deal signed overnight and thats what had pushed the market higher during the Asian session. If we are already long its adviceable to put a stoploss below the shooting star daily candle.
If we break the 1.63 level it is quite significant and if we break the top of the shooting star then we overcome a region of resistance which becomes more important. It looks less likely for that to happen but its possible.
If we break the bottom of the shooting star candle it is a sell signal and we then look for support at 1.61 and 1.60 levels and it looks like a pullback is coming.