Brakes Applied - Freefall Arrested

The Milan Index is not up robustly, rather it is trying to penetrate a support level that it has been dallying with since early August 2017. We saw a dramatic penetration on the 6^th of March when price reached 21448, though this was likely the market being swept up in the global wave of fear that was well in train by then. The current robustness evident in the US as well as Asia have not been similar in Milan. Technically speaking the price is still moving in a range bound by resistance at 22910 and support at 21952. We are of the opinion that price is likely to move lower than current levels. This is based on the repeated attempts to break out on the high side that failed and the overall perception that prices are falling and therefore likely to continue to do so.

Continuing its 2 week decline the pair yesterday failed in their attempt to reverse the trend and now continues falling. The Moving Average crossover on the hourly chart occurred yesterday and is still solidly in train. Volume is strong, meaning that the sentiment behind the move has a lot of trades supporting it. We call that sentiment or momentum. Should the price break through its current level which we believe it will, then the .9900 level is the next likely support level followed by .9890. Fundamentally the pair is falling due to the weakness of the Aussie resulting from the slump in commodity prices and the CAD is strengthening due to the rise in crude oil prices.