Good morning traders.
Yesterday saw 1.1250 tested again and taken out as the USDx came down to tag 97.00. As I write this morning we are still holding above at 1.1265. If we hold the next levels on the upside are 1.1280, 1.13 and 1,1325. First level Support for a further climb up is at 1.1253 right on top of what was our R1 resistance zone.
I tweeted yesterday that we are developing an inverse head and shoulders pattern on the hour chart. See below. If this pattern plays out to form then it adds confluence to a push up to 1.13 before balancing prior to the ECB and the FOMC tomorrow.
From a model perspective I mentioned yesterday I would be watching our zones for scalps in the first instance but we didn’t get any supportive pa. The short from R1 recorded a -13 stop out.
Nothing on the data chart for today so it a question of jumping in long where we can and riding it out. Long till we´re wrong – right :). In which case look for any dips back into the 1.1250s to fire up your buy button.
As mentioned above, 1.1280 would be the first target and the 1.13 thereafter. If we don´t get any support at the 1.1250s look for any dip below and retest from the underside to try a short. My preference is for longs for today but hey…. I have been known to be wrong !! We could also get meandering prices while we wait for tomorrows key risk events.
The Daily Chart
Nothing much to add to what I have said many times in the past about the daily chart. The push up yesterday looks supportive of higher prices but our experience of the eurusd tells us to be wary of any false higher price dawns :).
The Hour Chart
Levels as per. I have moved R1 and S1 further out from price to give any set and forget trades breathing space.
As said above the inv. H & S pattern, the key price action levels and the Fibs all line up nicely to suggest a further push higher before the ECB. That’s my view as we kick off the day but as ever, I will watch pa before hitting either the buy or sell button.
Have a good one.