ICmarkets
Short

Our take on the EUR...

FX:EURUSD   Euro Fx/U.S. Dollar
306 0 4
Well, we did not expect price to react so beautifully to the AB=CD bullish pattern at 1.1171 yesterday! In fact, we were not expecting it to trade above 1.1200, yet, the EUR rallied a little over 100 pips reaching highs of 1.1279 on the day.

Consequent to the above, daily supply at 1.1329-1.1269 is once again seeing some action, as is the weekly supply drawn from 1.1532-1.1278. Looking to the 4hr chart, however, we do not see any noteworthy resistances yet in play until supply at 1.1329-1.1301. With that, our team believes that price could potentially continue to advance today until reaching the above said supply zone.

Therefore, assuming that our analysis is correct and the EUR does indeed continue to advance, would we deem this 4hr supply zone a stable platform in which to look for shorts? This is certainly a viable base to sell from judging by the stern reaction seen previously on the 02/10/15 at 1.1381. However, traders need to be careful here. The previous touch could be the every reason why this area may fail, since a ton of offers/supply was likely consumed, thus potentially adding fuel to fake higher to supply sitting just above at 1.1366-1.1349.

As a matter of a fact, barring any news spikes, we have so much more confidence that the 1.1366-1.1349 area above will be the more higher-probability zone to trade from. We have placed a pending sell order at 1.13465 with a stop set above at 1.13717.

Levels to watch/live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: 1.13465 (Stop loss: 1.13717).
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