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Mark Wogan: 1.15 remains intact

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Good morning traders.

We had another close above 1.1450 yesterday but eurusd failed to take out or test the 1.15 level and overnight during the Asia session fell back to the 1.1430s. So yet again we have an attempt to break the top of the range which turned out to be a nervous quick look above before scurrying back to safety. At some point if we continue to be unable to break out above we could get a move to the downside to test the other side. For now we remain range bound with risk to the upside for a another test higher.

It seems that the political landscape as much as the economic one is keeping the lid on the eurusd. President Trump is to address the nation this evening over the border security issue which is the cause of the US Govt. shutdown. If he declares some form of National emergency, this added to the shutdown could further weigh on risk sentiment and aid USD safety flows balancing out the dovish comments from Powell last Friday. Moreover, Brexit still looms large on the ever closer horizon and the UK Govt. don´t appear to be making any progress on finding a resolution.

There is talk of extending Article 50 past the March 29 deadline but there is conflicting commentary as to whether this will be enacted. For now it seems PM May is waiting for the EU to add some form of comfort to the Irish backstop issue. If none is forthcoming it looks like Parliament will defeat May in the meaningful vote on the 15th. What happens then is unknown. That seems like an incredible thing to say given the historical weight of this vote. That the Govt. have no plan B (or so it seems) looks like a dereliction of duty to this writer. Whatever the outcome this uncertainty can only be negative the euro as well as sterling.

To be honest, with the political uncertainty we now have in Europe and the US, I will have to plead the 5th as it were and say I have no real idea what might happen in the coming few days. While its not my main aim with this morning diary to give you an in depth macro analysis as I´m only concerned with intraday action, I do like to try and paint a picture of the bigger picture landscape. But sometimes it is too confusing to say anything with any real certainty. At such times its better to say nothing – other than I don´t know :).

That said it won´t affect how I trade. We have levels, we have price action and we know what we are looking for. In which case we stay true to our plan and trade what we see.

The Daily Chart

The daily chart is not much changed from yesterdays. We are trading close to the range top so I would expect some action up to 1.15. Whether it sticks or fails is another matter.

The Hourly Chart

The levels are noted as per. I strongly suggest that you watch the lower time frames for trade entries and exits.

Good luck amigos.

 

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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