Larger bears may take a breather as daily studies are oversold

Wednesday’s Asian / European action was so far shaped in a long-legged Doji candle, signaling indecision, as oversold conditions on daily chart suggest some profit-taking after the pair was in a steep fall in past four weeks (down around 5%).

Bears faced headwinds from significant supports at 0.6463/58 (Fibo 61.8% of 0.5509/0.8007 / May 31 spike low), which offer solid ground for consolidation / limited correction.

Larger picture remains firmly bearish, with fresh pressure on Aussie dollar coming from stronger than expected US retail sales, which add to signals that the US economy is in a good shape and possible further rate hikes won’t be harmful that keeps the US dollar underpinned.

Markets also await release of FOMC July’s policy meeting, due later today, with prevailing expectations that the central bank will keep hawkish stance over monetary policy.

Daily studies are firmly bearish and along with negative fundamentals, point to mild correction before larger bears resume.

Falling 10DMA offers initial resistance at 0.6516, which should ideally cap, with extended upticks not to exceed broken Fibo level at 0.6547 (61.8% of 0.6170/0.7157) to keep bears intact.

Res: 0.6481; 0.6547; 0.6616; 0.6661
Sup: 0.6427; 0.6403; 0.6272; 0.6170