The momentum indicators, however, are currently favoring a bearish-to-neutral picture for the short-term trading as the RSI is pointing towards its 30 oversold mark and the MACD is flattening under its red signal line. The steep negative slope in the red Tenkan-sen is another discouraging signal.
The focus is now back on the 1.3200 mark and the 50% Fibonacci of the upleg from 1.3015 to 1.3381 as any decisive close lower could push the price straight to the 61.8% Fibonacci of 1.3155 and the 1.3143 former resistance level. Beneath the latter, the area between the 78.6% Fibonacci of 1.3093 and the February trough of 1.3067 could next halt downside movements.
On the upside, a rally above the 200-period SMA, which currently stands around the 1.3250 barrier, is required to persuade more buying. If it happens, the rebound could last until 1.3285, while higher the bulls could take a break around the 1.3340 resistance number before retesting the 1.3381 peak.
In the bigger picture, this week’s sharp downfall has violated the upward pattern started from the 1.3015 bottom, though only a closing price below the August 13 low of 1.3183 would confirm it.
Summarizing, the short-term risk is still skewed to the downside, with the 50% Fibonacci awaited to add more pressure once breached. A significant extension below 1.3183 would, however, signal the start of a downtrend.