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Following on from my potential trade idea yesterday, on the daily chart the nine-day RSI is at 18, which is the lowest level since November, while price is 2.6 standard deviations below the 20-day moving average. It could feasibly squeeze lower of course, but the risk for me now is the pair undergoes short covering to which I want to re-enter shorts.
On the hourly chart we are actually seeing triple divergence between price and the RSIs. Again, this could suggest a reversal.
On the daily chart the key level for me is 1.4555 (the 38.2% retracement of the latest sell-off), however this seems like a good level to place stops as it’s hard to see what will cause the pair to rally here in the short term. I would look to work offer into 1.4450, which is just under the downtrend resistance drawn from the June 4 pivot. I will update the idea if the pair trades here.