Recent losses also saw the unit nudge below the daily at 0.7517-0.7451 (now an acting ), thereby placing the daily support at 0.7334 in the firing range. Meanwhile, up on the weekly chart, the current weekly candle is now seen firmly trading within the confines a logged in at 0.7438-0.7315.
Our suggestions: Although a bounce from 0.74 is certainly not out of the question seeing as it is housed within the walls of the current weekly , the decisive close beyond the daily seen yesterday is concerning. In light of this, here is how we intend to approach this market:
• Wait and see if the H4 candles close beyond the 0.74 boundary. Should this come to life, our desk will need a retest to the underside of this number alongside a reasonably sized H4 close, before a short trade can be executed, targeting the daily support mentioned above at 0.7334. The reason we require the H4 close here is simply due to where price is positioned on the weekly chart.
• 0.7334 is not only an ideal take-profit zone, it’s also a beautiful place to buy from! A daily support that’s lodged within a weekly is, at least in our book of technical setups, a high-probability reversal zone, which is surely to produce a healthy bounce at best.
Data points to consider: FOMC member Bullard then speaks at 10.30am, followed by two other members taking the stage (Dudley/George) at 2.30pm GMT .
Levels to watch/live orders:
• Buys: 0.7334 (trading this number at market is a possibility here but is dependent on the time of day, stop loss: 0.7310 – beyond the weekly ).
• Sells: Watch for a close below 0.74 and then look to trade any retest seen thereafter (reasonably sized H4 close required).