Daily Outlook: Third time is a charm - after attempting to short for the third time in the past couple weeks (first time ended in loss, second time at 1.3400 ended in small loss after first lot hit +25 and second lot hit tightened SL) this latest short at 1.3490 has been panning out. Yesterday's primary trade (short near 3500) was triggered after the 12:00 4h candle yesterday pierced above, but failed to close above (false breakout) 1.3500 coupled with bearish 30m and 1h candlesticks in CP which triggered the trade. First lot was closed early at +25 but second lot remains with an open target and a SL just above 3500.
Pair has made some downward progress toward its rising trend support line (bottom black line) and we will remain short-term bearish as long as 1.3500 holds on the daily chart (strong daily support from late 2010). However, 1.3400 is also strong support that must be broken before any meaningful bearish retracement can take place in the short-term. We will be watching the 1.3400 level closely and any failure here will cause us to close-and-reverse our current short position for a re-challenge of 1.3500.
Trading Idea: Remaining short, but will look for a close and reverse around 1.3380-1.3400 on a failure or strong bullish candlesticks. Targets from 3380 at 3405, 3435, 3465 and 3495 for 115 pips.
If we see another rise before then we will look to add a lot to our position on some strong bearish candlesticks around 3480-3500, targeting another challenge of 1.3380-3400.