Daily view:
The cable invalidated the reversal Head-and-Shoulders pattern maintaining quite strong bullish momentum to the upside.
Daily closure above 1.5719 (the highest level in August) enhanced further bullish pressure to be applied, so that the bulls could step above 1.5760 (the highest level in June).
The pair expressed a bearish Harami daily candlestick of 1.6150, which was followed by daily closure below 1.6035, which took place on Friday. However, the cable bounced from the recent lows resuming the upside momentum, having climbed back above 1.6200 as the USD weakened during the previous trading days.
The previous bullish swing targeted 100% Fibonacci Expansion level. However, the current bullish swing was strong enough to bypass this level when the pair stepped above 1.6035 recording a daily high at 1.6262 which is 70 pips higher than 127.2% Fibonacci Expansion Level. However, most of the daily gains was lost affected by ISM manufacturing PMI resulting in an inverted hammer daily candlestick on Tuesday.
On Thursday, the pair expressed bearish engulfing candlestick which enhanced further bearish pressure on the pair probably establishing a bearish Head-and-Shoulders pattern to have its right shoulder located around 1.6150-1.6190, where a valid SELL entry may be taken.
Price fixation above 1.6205 enables the bulls to reach 1.6285 very quickly (141.4% Fibo Expansion), where intraday resistance should be applied.
