When we said we wanted to see some movement, we didn’t mean at the expense of long term value. I guess that’s what we get for trying to push our strategy into some entries. We did get into some trades overnight, of course. It’s just that they came to the downside. And, more importantly, our longer term level of focus – the 1100 level that we have been pitching as long term support for a while now – finally gave way overnight and then once again this morning.
We have seen a short term recovery bring price to trade back above this level, and we’re going to go out on a limb and suggest it may hold for the day.
Whatever happens, we’re going to be ready with a range in focus to take advantage of any movement that we see play out today – be it to the upside or to the downside.
As ever, and before we get going, take a look at the chart below. It’s got our range overlaid in green, and it shows the levels that we were looking at overnight (as well as how price responded to these levels).
So, as the chart shows, the range in focus is defined by support to the downside at 1106 (yes, we’re cutting it pretty fine, we know!) and resistance to the upside comes in at 1119. We’re going to be a little more aggressive on the long side than we are the short, based on what we’ve just said about the 1100 level. So, long on a close above resistance towards an upside target of 1130, and short on a close below support towards 1100. A stop on the first trade somewhere around 1115 looks good, whereas we’ve got to be ultra tight on the short side, so a stop at 1108 works.
Charts courtesy of Simple FX