- Breakdown now testing initial support targets
- Updatedtargets & invalidation levels
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boke below a key support range yesterday at – this region is defined by the 61.8% retracement of the post-Brexit advance, the 50% retracement & the lower median-line parallel extending off the December lows. The focus remains lower while below this range with broader bearish invalidation up at the monthly open at . Interim support is being tested now at with a more significant support confluence eyed lower at . Subsequent support objectives eyed at the 2016 open & .
We’ve been tracking this setup on SB Trade Desk for the past few weeks and this near-term slope extending off the late-September highs has continued to define price action. Note that today’s decline takes the pair into confluence support at and the immediate risk is for a rebound off this mark before turning lower. That said, look for resistance up at the median-line / with a a break lower targeting the aforementioned support targets.
From a trading standpoint, we’ll be looking to fade euro strength while within this formation with a break below key support at 1.0930 needed to mark a more meaningful decline in the pair. A quarter of the daily average true range yields profit targets of 22-25 pips per scalp. On the data front, look for the U.S. Retail Sales & the U. of Michigan confidence survey to offer up some volatility as we head into the close of the week with Fed Chair Janet Yellen also on tap. Continue tracking this setup and more throughout the week- Subscribe to and take advantage of the DailyFX New Subscriber Discount.
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—Written by Michael Boutros, Currency Strategist with DailyFX
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