Scenario 1:
Possible short around current price (1.386/7X) within the smaller wedge. Targeting the lower trend line (low 1.37XX region). Use tight stop loss since price can just stay here until NFP tomorrow then spike up (Scenario 2).
Once price hits the lower trend line of the smaller wedge (low 1.37XX region), this yields a possible long entry with a stop loss below the trend line. Targeting the top trend line of the bigger wedge (mid 1.39XX region).
At this point, scenario 2 comes into play.
Scenario 2:
Wait for price to hit top trend line of the bigger wedge (around mid 1.39XX region) for a possible short.
First target is the low 1.38XX region (previously resistance)
Second target is the bottom trend line coming in at the low 1.36XX region.
Consider exiting if price closes above top trend line.
NOTE: This pair has shown a strong negative correlation with USD/CHF lately. So if you plan to trade on my analysis tomorrow; I suggest you pick either EUR/USD or USD/CHF. Don't double up and take both, just pick one and go with it since they both have the same risk reward.
I personally am leaning towards USD/CHF due to the fact that the SNB can intervene at any point in time given the high demand for CHF.
Exchange Rates 101: Demand = Buy, People buying CHF means X/CHF goes down. Back in 2011, the SNB pegged EUR/CHF at a fixed exchange rate of 1.2000 due to the excessive demand for CHF, which was causing problems for their economy.
UPDATE: GIVEN TIME LAPSE SINCE I POSTED THIS ANALYSIS, ENTRY REGION SHOULD BE MOVED TO HIGH 1.39XX to 1.4000, PRICE WILL NOT HIT THE TREND LINE IN THE MID 1.39XX REGION.
Possible short around current price (1.386/7X) within the smaller wedge. Targeting the lower trend line (low 1.37XX region). Use tight stop loss since price can just stay here until NFP tomorrow then spike up (Scenario 2).
Once price hits the lower trend line of the smaller wedge (low 1.37XX region), this yields a possible long entry with a stop loss below the trend line. Targeting the top trend line of the bigger wedge (mid 1.39XX region).
At this point, scenario 2 comes into play.
Scenario 2:
Wait for price to hit top trend line of the bigger wedge (around mid 1.39XX region) for a possible short.
First target is the low 1.38XX region (previously resistance)
Second target is the bottom trend line coming in at the low 1.36XX region.
Consider exiting if price closes above top trend line.
NOTE: This pair has shown a strong negative correlation with USD/CHF lately. So if you plan to trade on my analysis tomorrow; I suggest you pick either EUR/USD or USD/CHF. Don't double up and take both, just pick one and go with it since they both have the same risk reward.
I personally am leaning towards USD/CHF due to the fact that the SNB can intervene at any point in time given the high demand for CHF.
Exchange Rates 101: Demand = Buy, People buying CHF means X/CHF goes down. Back in 2011, the SNB pegged EUR/CHF at a fixed exchange rate of 1.2000 due to the excessive demand for CHF, which was causing problems for their economy.
UPDATE: GIVEN TIME LAPSE SINCE I POSTED THIS ANALYSIS, ENTRY REGION SHOULD BE MOVED TO HIGH 1.39XX to 1.4000, PRICE WILL NOT HIT THE TREND LINE IN THE MID 1.39XX REGION.