Short from 1.3171 following the retest of 1.32...
As anticipated, the H4 ascending channel formation (1.3165/1.3308) gave way during yesterday’s sessions. This was something we mentioned in past reports, and the reason we believed this to be the case was not only did we have daily resistance at 1.3272 in play, but let’s also not forget that the current weekly demand was also hanging on by a thin thread.
In seeing that H4 price breached the 1.32 handle, our desk is predominantly bearish right now. The reason for this, other than the recent break of 1.32, is simply due to daily support at 1.3212 also being engulfed. Technically speaking, this has possibly cleared the path south down to a daily demand area coming in at 1.3050-1.3103, which happens to be positioned within the walls of a weekly demand at 1.3006-1.3115/weekly trendline support extended from the high 1.1278 (the next downside target on the weekly timeframe).
Our suggestions: We mentioned in yesterday’s report that should 1.32 be consumed and retested as resistance, we would consider shorting this market and targeting the top edge of the weekly demand at 1.3115. Well, given the recent bearish rejection seen from the underside of 1.32, we have decided to sell at market from 1.3171, with a stop positioned at 1.3205 (34pips). Now, the distance to the take-profit is 56 pips, so there’s at least one and a half times the risk to be had here.
Data points to consider: US Pending home sales at 3pm, followed closely by Crude oil inventories at 3.30pm. BoC Gov. Poloz speaks at 2.30pm GMT+1.
In seeing that H4 price breached the 1.32 handle, our desk is predominantly bearish right now. The reason for this, other than the recent break of 1.32, is simply due to daily support at 1.3212 also being engulfed. Technically speaking, this has possibly cleared the path south down to a daily demand area coming in at 1.3050-1.3103, which happens to be positioned within the walls of a weekly demand at 1.3006-1.3115/weekly trendline support extended from the high 1.1278 (the next downside target on the weekly timeframe).
Our suggestions: We mentioned in yesterday’s report that should 1.32 be consumed and retested as resistance, we would consider shorting this market and targeting the top edge of the weekly demand at 1.3115. Well, given the recent bearish rejection seen from the underside of 1.32, we have decided to sell at market from 1.3171, with a stop positioned at 1.3205 (34pips). Now, the distance to the take-profit is 56 pips, so there’s at least one and a half times the risk to be had here.
Data points to consider: US Pending home sales at 3pm, followed closely by Crude oil inventories at 3.30pm. BoC Gov. Poloz speaks at 2.30pm GMT+1.
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