Given the strong close beyond 1.1150 and the fact that daily action has established itself within the confines of a daily coming in at 1.1224-1.1104, it’s possible we may see a continuation move down to the 1.11 handle today. Additionally, should price take out 1.11 either today or next week, the D-leg of a H4 may take shape down to around the 1.10 region.
Since we’re adding the H4 Quasimodo support into the equation, our buy zone for the above said H4 is fixed between 1.0978/1.1011 (lower green box). Aggressive traders may place stops just below this green zone, whilst more conservative traders might opt to set stops beyond the X point of the around the 1.0947ish range.
On the data front, traders are likely eyeing the Preliminary German GDP release along with USD retail sales data a little later on. Therefore, do remain vigilant around those times guys!
Our suggestions: In view of the points noted above, here’s our two pips’ worth:
• Look to sell any retest seen to the underside of 1.1150, targeting 1.11 as your immediate take-profit zone. Should price reach here, we’d also ideally be looking to move our stops to breakeven at this point.
• In the event that the EUR does indeed continue to weaken, we’d be looking to buy the pair within the above said H4 reversal zone, since it also sits on top of the daily at 1.0909-1.0982 – the next downside target on the .
In regards to selling 1.1150, we’d also advise waiting for a lower timeframe sell trigger before placing capital on the line (see the top of this report) as fakeouts are common around psychological levels! Concerning longs, we would, dependent on the time of day and H4 approach, look to enter long at market from the aforementioned H4 buy zone, taking the more conservative approach to stops.