Our suggestions: While to many traders, a bounce lower from the 1.10 neighborhood is a logical scenario. Nevertheless, we would have to humbly disagree here given the situation over on the bigger picture (see above). As such, we’re looking for a decisive CLOSE ABOVE 1.10 today, as this will likely do two things. Firstly, confirm upside strength from the aforementioned higher-timeframe supports, and secondly, open up the floodgates for price to challenge the H4 mid-way resistance 1.1050/H4 resistance1.1075. Remember guys, this H4 resistance also represents the underside of the daily (1.1072) we mentioned above: the next upside target on the higher timeframes. Therefore, expect some opposition around this region.
A close above 1.10 followed by a retest that holds firm would, at least in our book, be sufficient enough to condone a long entry in this market, targeting 1.1050/1.1075. Fundamentally, however, we have US CPI data scheduled to hit the wire at 12.30pm GMT today, so do remain vigilant around this time!
Levels to watch/live orders:
• Buys: Watch for a decisive close above 1.10 followed by a firm retest as support (Stop loss: beyond the supporting candle).
• Sells: Flat (Stop loss: N/A).