Longs from 1.07 is a possibly given the confluence...
Across the board, we saw the US dollar extend higher yesterday, consequently pressuring the shared currency to fresh lows of 1.0709 on the day. What this move also accomplished was a clean break through weekly support at 1.0819, which, as you can see from the chart, has now positioned the weekly candle around a trendline support drawn from the low 0.8231. In addition to this, the daily candles are also currently seen flirting with a support level penciled in at 1.0710. The last time this barrier was visited was at the beginning of the year, and the response from here managed to propel the EUR over 900 pips north! So it’s definitely not a level one wants to overlook!
Given H4 action bottomed just ahead of the 1.07 handle yesterday, we feel this level could be tested today. However, a fakeout through the hurdle is almost guaranteed, since there is a small, almost hidden, demand lurking just below it at 1.0646-1.0689 (visible on the H1).
Our suggestions: Buying at current prices is tempting given the daily support and weekly trendline in play. Be that as it may, our desk has no interest in buying right now. Instead, what we’re looking to do is trade the potential fakeout through 1.07. A nice-looking H4 buying tail that extends through 1.07 into the 1.0646-1.0689 would be a fine confirming signal to jump in long this market, targeting the 1.08 handle.
Data points to consider: German Prelim GDP at 7am, US Retail sales at 1.30pm and FOMC member Fischer speaks at 6.30pm GMT.
Given H4 action bottomed just ahead of the 1.07 handle yesterday, we feel this level could be tested today. However, a fakeout through the hurdle is almost guaranteed, since there is a small, almost hidden, demand lurking just below it at 1.0646-1.0689 (visible on the H1).
Our suggestions: Buying at current prices is tempting given the daily support and weekly trendline in play. Be that as it may, our desk has no interest in buying right now. Instead, what we’re looking to do is trade the potential fakeout through 1.07. A nice-looking H4 buying tail that extends through 1.07 into the 1.0646-1.0689 would be a fine confirming signal to jump in long this market, targeting the 1.08 handle.
Data points to consider: German Prelim GDP at 7am, US Retail sales at 1.30pm and FOMC member Fischer speaks at 6.30pm GMT.
IC Markets is an online forex broker specialized in providing transparent trading solutions to both retail and institutional investors alike. We provide superior execution technology, lower spreads and unrivaled liquidity.