On the daily chart below, we can see that the sellers couldn’t break decisively the key support level at 32684. The price has pulled back notably since then and it’s now near the resistance level at 33538 and the red long period moving average. This will be a key resistance zone where the sellers should start piling in.
The buyers will need a clear break above that zone to get more conviction and target the next resistance at 34477.
It must be said though that the rally on Friday out of the strong ISM Services PMI report looks more like a squeeze than a true move since hot economic data should be bad for risk assets as the Fed will need to do more in order to slow down the economy and bring inflation back to their target.
On the 4 hour chart below, we can see that falling into the support level at 32684, the price was diverging with the MACD. This is a signal of a loss of momentum and what follows next is generally a pullback.
After breaking the trendline though, the buyers started to pile in and the sellers couldn’t maintain control, opening the door to a notable squeeze. The price is now near the key resistance at 33538 where we can also find the 50% Fibonacci retracement level for confluence. This is going to be the last line of defence for the sellers.
In the 1 hour chart below, we can see that the near term trend now is bullish as the moving averages are crossed to the upside. We may see a pullback now after the strong parabolic rally on Friday and the buyers will eye the trendline and the red long period moving average as support for another rally.
The sellers, on the other hand, may start to pile in if the price breaks below the trendline without waiting for it to come to the resistance at 33538.
