Good morning traders.
Yesterday went pretty much to plan. We were long from S1 after another subdued day which eventually went on to be a model winner. I did tweet yesterday to take some off and move stops to break even (i.e. treat as a scalp) as it looked the safest option to me as we were entering the later afternoon session. Whichever way you managed it you should have been able to bank 15 pips minimum.
For your information when I am still in a trade after regular trading hours ( for me 9.00 – 17.00 CET) I always move my stop to BE and take some partial profit to reduce overnight risk.
For today risk off is gathering pace it seems in the equities space. US markets dropped further with the S&P500 and the Nasdaq both closing below previous all time highs suggesting we could be setting up for a false break out scenario. The China US trade talks are crucial right now and if there is no progress and a trade war ensues risk will take a dive.
This did not however fire up the USDx on safe haven flows for now as the index still looks to me to be looking at a test of the 97.00 level. But I´m not holding my breath either way. We will trade what we see on the chart regardless. You must be getting tired of hearing me say this by now :).
Look out for central bankers on the wires throughout the afternoon session. Other than that there is no data of note slated.
The 240m Chart
As I mentioned yesterday the 4h chart is in a triangle formation right now. We pushed down to the old major low of 1.1175 yesterday (our S1) before rallying back to the top of the pattern as I write. Look for a break above and a retest to get long on this pattern. Upside targets would be yesterdays high at around 1.1220 and then the 1.1250s and the spike top at 1.1264.
.Alternatively if we can´t break through the 1.12s decisively we will most likely test the 1.1175s again and the odds would be increased for a push lower,
The Hour Chart
Levels as per.
The reaction points remain the same as yesterday although I have slightly amended the S1 and R1 levels. S1 is now yesterday’s low which coincided precisely with the Sunday open low. Always something to watch for as a retest of Sunday levels is very regular occurrence.
The R1 level is really the zone between the body and the top of the wick as shown. We could set the level at the body top but then we risk a deeper push into the wick which is greater than our model stop of 13 pips. Hence watch the level for entry on lower time frame patterns. Alternatively set your entry at the midpoint or the top of the zone.
Scalp levels are noted above and below current price.
Have a good day amigos and if you perform as well as Liverpool did last night with determination, skill and courage, you´ll not go far wrong :).