A bullish trend has been in play since June and price is now at a crucial point showing potential rejection at the key 0.7942 level. The pin bar that formed on the 14th September may see some long traders trapped as price false broke above swing highs formed in March and April 2015.
The false break was confirmed on Friday 15th September with a strong bearish close, any long traders may be forced to liquidate their positions creating further bearish pressure.
With our bias to the short side the hourly time frame may provide us with an entry. Price on the H1 has formed a Head and Shoulders pattern with the neck line recently broken. MACD divergence is also present and with price below the 50 EMA we will look to initiate a short on a pull back to the H&S neckline which coincides with the daily pivot.
Our target will be placed around the 0.7788 level.