However, even if this level would get passed, the rate would still face the resistance of the 1.4000 mark, In addition, above the 1.4000 there were sell orders spread out up to the 1.5400 level.
Daily Candle Chart
On the daily candle chart, it could be observed that the rate ignores the resistance and support of the simple weekly pivot points. In some cases the monthly pivots manage to provide short lived resistance or support.
However, the daily simple moving averages like the 55, 100 and 200-day SMAs have shown since August that they manage to keep the rate down or, as in the most recent case, push the pair up.
For example, at the start of December, the rate was approached by the 55-day simple moving average near the 1.0000 level. As the pair came close to the SMA by five pips, it reversed its direction and began the December surge. Due to that reason the five pip range around the SMA should be watched closely.
Market Depth
By looking at the market depth data, clusters of resistance and support can be observed.
First note that the pair is unlikely going to decline below 1.2700, as at that level a massive buy order cluster starts and it ends only at 1.2200.
In addition, there were buy orders concentrated at 1.2000 and 1.1500.
Meanwhile, sell orders start at 1.3900 and are spread out almost equally up to the 1.5400 level. Although, in this zone one can spot that there are more orders near round levels like the 1.4500 and 1.5000.
© Dukascopy Bank SA
© Dukascopy Bank SA
Future outlook
Combining the technical chart with the market depth data, one can create a couple of future scenarios to act on.
In general, the rate is most likely set to trade sideways above the buy orders at 1.2700 and below the 1.3900 level, which kept the rate down since November. The sideways trading should last until the overbought pressure is removed. It would be signalled by the approaching of the 55-day simple moving average.
Afterwards, the pair would gradually push higher through the sell orders located from 1.3900 to 1.5400.
On the other hand, the pair could pass the support of the 1.2700 to 1.2500 zone. In this case the rate would reach for the 1.2000 level. At that level buy orders were located at. Moreover, the 55-day SMA was expected to reach this level by Christmas.