Good morning traders.
Yesterday saw our pair move up from Fridays lows to an intraday high in the European morning of 1.1382, 19 pips above our R1 level. I was in two minds whether to place it (R1 that is) where I did or a little higher at 1.1380. This is not some kind of after the event chart fitting. It is a good lesson.
If you look at the 5m chart below you´ll see where I had set my trade levels for intraday scalping on the lower time frame.
I had a level at 1.1365ish (the R1 I posted on the hourly) and a level at 1.1380.
I didn’t want to set 2 resistance levels so close together when I posted yesterday morning so I chose the lower level. It was still valid and a good place to trade but the 1.1380 was more refined as it turned out.
Why? Because it also enabled some more liquidity to be taken.
What I mean is Friday had a retest of the 1.1380 level (area noted with grey ellipse) so there would have been some liquidity (there doesn’t have to be much) in the shape of resting buy (stop) orders just above it and its always good to try and figure out your S&R levels where there is some liquidity.
Moreover, we know the 80s are a good place to look for trades just as are the 20s and 50s as I´ve commented on before. It was also pretty much in line with the 61.8% Fib of the Friday high and low.
When you are ´scalping´around intraday the hourly chart doesn’t give you as much granularity as the 15m and 5m charts. I would strongly recommend that you take note of the lower time frame.
Mark up the levels that stand out and watch what happens when they are tagged. Use tight stops and even if you only bag a few pips – you might get a runner!
Anyway I just wanted to point this out.
So lets look at today.
The Daily Chart
Draghi´s comments yesterday afternoon didn´t trigger a push below 1.13 and we held the Friday low for now so the same applies today as for yesterday. The inverse head and shoulders is still in play technically.
However, the Monday pinbar looks bearish and I suspect we are looking for a push lower. I´m watching out for tests of and below the 1.13. But, as ever I will trade my levels.
The Hourly Chart
Support & Resistance are noted as per. Remember what we said above. Check your lower time frame charts for greater detail.
Ok. Load up, be ready and good luck.