<p>On the daily chart below, we can
that there’s a possible <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>double
top pattern</a> with the high at 0.6514 and the neckline at
0.6191. If the price falls below the neckline, the pattern should be confirmed
and the measured target would be in the 0.5900 area. </p><p>The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>divergence</a> between the second top and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a> is also an extra signal of weak
upside momentum and it strengthens the pattern. </p><p>The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> are pointing to further downside movement as the blue short period
moving average is below the red long period moving average. As things stand,
the price should at least get to the neckline.</p><p>On the 4 hour chart below, we can
see a ranging price action as traders are trying to decide if we get to a soft
landing where inflation is falling and the labour market remains resilient and
one where inflation doesn’t come down to the Fed’s 2% target requiring higher
rates and eventually a hard landing. </p><p>Yesterday’s <a target=“_blank“ href=“https://www.forexlive.com/news/us-january-cpi-64-yy-vs-62-expected-20230214/“>CPI</a> report came out basically as
expected and we just saw pure choppiness, but the M/M readings are too high to
hope for a return to the Fed’s target. In fact, the market <a target=“_blank“ href=“https://www.forexlive.com/centralbank/december-fed-funds-pricing-hits-5-20230214/“>priced
out cuts</a> this year and the terminal rate is now seen a bit higher than what the
Fed has projected in December. </p><p>Nevertheless, the sellers will
need to firmly break the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 0.6270 to extend the move to
the neckline or lower. The buyers will need to get above the 0.6413 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> as that would be the last line
of defence for sellers.</p><p>On the 1 hour chart below, we can
see more closely the range that’s been going on for over a week now. The 38.2% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level found sellers and there’s also a much
stronger level at 0.6413 where we have a previous swing resistance and the 50%
Fibonacci level. </p><p>For now, the sellers are in
control and today’s <a target=“_blank“ href=“https://www.forexlive.com/news/why-wednesdays-us-retail-sales-report-could-be-stronger-than-expected-20230214/“>Retail
Sales</a> report will probably yield some movement. </p><p>If the data beats expectations,
we may see more downside in the pair as it’s more likely that the market is now
considering good news as bad news due to a possible higher terminal rate. On
the other hand, a miss may get us back into the range. </p>
that there’s a possible <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>double
top pattern</a> with the high at 0.6514 and the neckline at
0.6191. If the price falls below the neckline, the pattern should be confirmed
and the measured target would be in the 0.5900 area. </p><p>The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>divergence</a> between the second top and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a> is also an extra signal of weak
upside momentum and it strengthens the pattern. </p><p>The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> are pointing to further downside movement as the blue short period
moving average is below the red long period moving average. As things stand,
the price should at least get to the neckline.</p><p>On the 4 hour chart below, we can
see a ranging price action as traders are trying to decide if we get to a soft
landing where inflation is falling and the labour market remains resilient and
one where inflation doesn’t come down to the Fed’s 2% target requiring higher
rates and eventually a hard landing. </p><p>Yesterday’s <a target=“_blank“ href=“https://www.forexlive.com/news/us-january-cpi-64-yy-vs-62-expected-20230214/“>CPI</a> report came out basically as
expected and we just saw pure choppiness, but the M/M readings are too high to
hope for a return to the Fed’s target. In fact, the market <a target=“_blank“ href=“https://www.forexlive.com/centralbank/december-fed-funds-pricing-hits-5-20230214/“>priced
out cuts</a> this year and the terminal rate is now seen a bit higher than what the
Fed has projected in December. </p><p>Nevertheless, the sellers will
need to firmly break the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 0.6270 to extend the move to
the neckline or lower. The buyers will need to get above the 0.6413 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> as that would be the last line
of defence for sellers.</p><p>On the 1 hour chart below, we can
see more closely the range that’s been going on for over a week now. The 38.2% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level found sellers and there’s also a much
stronger level at 0.6413 where we have a previous swing resistance and the 50%
Fibonacci level. </p><p>For now, the sellers are in
control and today’s <a target=“_blank“ href=“https://www.forexlive.com/news/why-wednesdays-us-retail-sales-report-could-be-stronger-than-expected-20230214/“>Retail
Sales</a> report will probably yield some movement. </p><p>If the data beats expectations,
we may see more downside in the pair as it’s more likely that the market is now
considering good news as bad news due to a possible higher terminal rate. On
the other hand, a miss may get us back into the range. </p>
This article was written by ForexLive at www.forexlive.com.