We have a good opportunity on the long side here, brewing behind the scenes. We are looking for bears to lose steam, and the pair to slow down, to go long on strength. This decrease of the ATR values shows momentum's waning, meaning that the market has been one sided for a while (in this case, the last leg of selling slowing down). We can follow the 'path of least resistance' which is indicated by RgMov, which in this case, gives us a bullish outlook as more favorable.
Failure to hit 113.253 by the close of the 21st will confirm that the bears are losing steam, further validating this trade idea. We can either take a new daily high as long entry, risking a drop to the recent lowest low after today's close, or we can wait for the timer to expire and bears to fail reach the target to enter longs on strength. Keep an eye on the BOJ this week, the move out of this triangle will be quite sizeable.
Good luck,
Ivan Labrie.
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The trade to the long side got invalidated for now. It's looking like a short now, but better wait for FOMC to be sure.
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I expect a reaction 3 standard deviations above the mean regression line from the Brexit date to FOMC:
You might be able to buy dips towards 115.5, risking 1 average range down (1.1 points)