“INDICATOR OF THE DAY” - RELATIVE STRENGTH INDEX (RSI)
The recent pullback in the pair has not gone unnoticed, with the market most recently closing back below the 200-Day SMA for the first time since May 2008. However, daily studies are starting to look stretched and with the market now trading by the bottom of a multi-week range, we believe the risks from here are for a sizeable upside move.
As such, we would recommend that traders watch the daily RSI closely and look for opportunities to start to buy the pair once the indicator trades to the 30 level. The daily RSI in the pair has been an extremely useful indicator, and as can be seen in the chart above, any dips towards the 30 level over the past several months have resulted in impressive rallies. We have issued a buy recommendation at 1.1780 on Monday.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel’s reports in a more timely fashion, e-mail [email protected] and you will be added to the “distribution” list.
Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)