MAKING THE CASE FOR TARGET 2...AND BEYOND....
We reached target 1 on this easily for a quick profit of +206 pips last week. Since then, prices had declined back down into the PRZ. However, prices did not break/close through it and the pattern is still valid. You can also see on my chart where I show that this has strong confluence with several other factors that would also suggest a long position is warranted:
1. The rising wedge/pennant pattern that had formed was broken to the downside thus filling the . The profit target for the wedge/pennant was reached within the PRZ of the (red dashed line)
2. The wedge/pennant also contained a and the profit line projection for the also had confluence with the completion of the .
3. The also is at the bottom of the larger pattern.
FUNDAMENTAL CASE FOR A LONG
Though I don't use fundamentals to determine a trade, I do pay attention as they do have relevance. With the Greek referendum over and Greece voting "No" to more austerity measures, the market has already priced in the result with the gap down on this week's opening. In fact, today's gap down was much more mild than expected given the huge build-up leading up the vote and anticipation of the market reaction. Ministers of the EZ will get together and now decide what to do. The vote does not mean an imminent "Grexit" with some members of the EZ vowing to not let Greece exit and will do whatever it takes to help resolve the crisis. If an acceptable solution is agreed upon and formally accepted by Greece, then the euro will react accordingly and might see a large jump up this week or next. Personally, I would expect some sort of "debt relief" package forthcoming with news announcements causing some positive market reactions.
I took profit on the the target 1 and banked those pips closing out 50% of my position. I have now taken another position LONG hoping to reach target 2 along with holding the 50% of the original position. Upon reaching target 2, I will take 50% of the second position and then hold remaining positions LONG for further upside.