Over on the bigger picture, we can see that weekly action is now trading within touching distance of a major coming in at 1.0333-1.0502. Meanwhile, thanks to yesterday’s selloff, the daily Quasimodo support at 1.0557 was consumed and has potentially opened the floodgates down to 1.0494: another Quasimodo support!
Our suggestions: On account of the above points, we have the H4 candles kissing support at 1.0550, the daily candles suggesting a downside move to 1.0494 and the weekly candle positioned nearby the top edge of a at 1.0502. The confluence seen molded around the 1.05 handle is, at least in our book of technical setups, enough to permit a pending buy order at 1.0495 with a stop placed below the head of the daily Quasimodo formation at 1.0459.
Granted, this does mean, as we mentioned in Monday’s weekly report, buying into the current downside flow brought on by the possibility of a rate hike in December. However, we’re not looking for a full-blown reversal here, simply a well-planned bounce back up to the 1.0557 region as an immediate take-profit zone.
Data points to consider: German Ifo data at 9am. US banks will be closed today in observance of Thanksgiving Day.