Good morning traders.
First my apologies for yesterday. A power cut shut me down right in the middle of writing the mornings piece and by the time it was sorted it was little late to finish. The dogs got an early walk though so they were happy :).
It was an auspicious time to lose power as I was in full flow about the important break of the 1.1175 with a daily lower close.
Yesterday we got another lower close and its looking like this should now open up tests down to 1.11 where we have some stops and then a run on 1.10 to fill in the gap / void we have had on the charts for some time.
Whether it will take a shot quickly or carve out a lower range as we have also discussed remains to be seen although taking this barrier level out suggests that we shouldn’t take long in moving down.
The euro wasn’t helped by poor Ifo data and the divergence between Europe and the US vis a vis growth seems to be widening with the US posting a beat on core durable goods yesterday after a number of decent data prints while the EU continues to print data misses with commentary talking up risks to the downside.
The USDx is powering ahead crushing all resistance at the moment and looks like it could be fixing for a run up to 100.
For today we have US advance GDP out at 2.30 CET which should be instrumental in how we close out the week.
The Weekly Chart
I’ve posted the weekly chart as its a little clearer on the higher time frame to see what we are now faced with on the downside. The void is easy to see as are the stops below the 1.11 level. Below 1.10 takes us down ro 1.0850 where we have some decent support although I don´t think these 1.08 levels need concern us for now.
The Hour Chart
Levels as per.
With little structure to work with below the 1.1175 level its difficult to set support levels in which case we will need to watch how the price action unfolds to create intraday S & R and focus on the strategic 20´s and 00 levels. Any push to 1.11 should give us a good long opportunity for at least a scalp trade. Resistance is clear at the 1.1175 low and 1.12 levels and we have a decent R1 and R2 zones.
Have a good one.