With price reaching highs of 1.1487 yesterday, we see very little reason why this pair will not continue northbound today up to at least psychological resistance 1.1500, followed closely by supply at 1.1560-1.1512. Building on this, daily action shows that price recently broke above a major swap at 1.1432, thus potentially clearing the pathway north up to supply given at 1.1712-1.1614. In spite of the recent surge in buying, however, we mustn’t forget that the is still loitering within supply at 1.1532-1.1278.
Given the above, here is what our team has jotted down so far for today’s upcoming trade:
• Buying at current prices is out the question. Risk/reward would be totally skewed! In the event of a pullback to the ignored Quasimodo line at 1.1440 before hitting 1.1500 (our target), there could be an opportunity to buy this market from here should lower timeframe support hold firm.
• Assuming the market continues to rally early on in Asia, we will be looking to short into this momentum from supply at 1.1560-1.1512, in the hope that stops taken from 1.1500 would be enough to fuel an intraday bounce lower (lower timeframe confirmation required).
Levels to watch/live orders:
• Buys: 1.1440 Tentative – confirmation required (Stop loss: dependent on where one confirms this level)
• Sells: 1.1560-1.1512 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).