Daily Outlook: While I am busy digging my way out of a blizzard (6 inches yesterday, another 10 inches today), the Euro bulls have wasted no time in blasting through the once formidable 61.8% barrier. If you were short I hope you stop-and-reversed there for the 100+ pip run-up after the break.
For today, we can't go against the bulls - not until they break that sharp bullish trend line - and will look for opportunities to buy small lots on bounced off the trend line, and stop-and-reverse below it. The slope on that support trendline is extremely high and, as such, is unsustainable. Eventually the pair will have to either consolidate or correct to clear some of the overbought pressure away before it can resume its climb - but, of course, the timing is always the question. And for us, the timing resides with trendline remaining intact or breaking.
Fundamentally, we had thought that a revolution in a major country would make risk-aversion (dollar-strength) the main theme but apparently that revolution is going better than expected. Another reason for us to ignore market noise and focus on the charts.
Trading Idea: Primary trade is a long near trend rising support (currently around 3820) with targets at 3845, 3875, 3900 and 3930 for 110 pips profit.
Secondary trade will be a short if the rising trend support is broken and with targets down to 3800, 3775, 3750 and 3720 for 100 pips.