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Mark Wogan: Which way Wednesday?

Good morning traders.

We had somewhat of a turnaround Tuesday yesterday as the euro retraced some lost ground against the USD. We had its card marked fortunately with our S1 level which went on to be a model strategy winner with +26.  As I was cautious, however, I suggested taking profit above 1.1280 as we were coming in to resistance and it was a counter trend trade. If you held though it continued to climb through the remainder of the London session negating any short plays.

As we have had such a one way down move for the past week and a half we could see some further up moves today. By the look of that daily outside engulfing candle – who knows maybe we are set to test the upside of the range again :).

For today my plan is to watch for any move back to 1.13 in the first instance to see whether we get any bullish price action that suggests we might hold the level. If so I will take a long model position.

If we continue to move up from here the first resistance level comes in at around 1.1356 which is also the 38.2 Fib of the swing down. This could be an important level as the 38.2 Fib is notable for holding back any weak rallies. If I see any bearish pa here i will take a short. Further up at 1.14 we are also just short of the 61.8 Fib another key Fib level.

As always keep an eye on the way these levels react as they can always change their role with S becoming R and vice versa.

For your information I will trade these levels in any case for scalp trades with a view to capturing any pips we get from a first test bounce regardless of pa.

There was nothing in Powell´s speech yesterday evening to move the market and US equities had a strong day on the back of increased risk sentiment and the hope of a deal between the US and China. For today we have US CPI data out this afternoon.

From a macro pov I think its important to remember that nothing has changed in the eurozone. Political and economic headwinds are still in place so from a longer term perspective I don´t feel there is anything to suggest the euro is gaining strength. My view is that this move is a technical one. But that´s not to say it can´t run further as traders might feel the need to cover shorts.

The Daily Chart

As noted we closed with an outside candle on the daily which is a good indication usually of a continuation of the direction of travel.

The Hourly Chart

Levels as per.

Good look. Steady as she goes amigos.

Mark Wogan

Hi. I started my investing / trading career in 2000 and since 2011 I have been trading on a full time basis.

My focus here will be the currencies and in particular the EurUsd pair and I will post my charts on a daily basis marking up the levels I´m interested in and comment on the bigger picture context and anything else I´ll be watching out for during the day.

I also do a little coaching on a one to one basis so if you´re interested in learning how to trade just give me a shout and we can have a quick chat.

https://www.markwogan.com

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