Daily Outlook: Bulls managed to push the pair up 180+ pips yesterday on a surge of risk appetite with most analysts pointing to China's confirmation that they were not pulling out of Eurozone investments. On top of that the 180 pip push completed a bullish engulfing pattern on the daily charts, which adds to the growing body of evidence that a bullish correction is coming. That evidence includes: the bullish engulfing candlestick mentioned above, the gravestone doji from Tuesday, the potential double-bottom now formed at 1.2150.
It is a Friday and as usual I will take the day off, but if I were in the markets today I would be looking primarily for a long on a bounce off of rising trend support (now at 1.2260) or at 1.2215 support.
Trading Idea: I don't trade on Fridays. But if I did, my primary trade would be a long with confirmation in the 1.2260-1.2220 zone with long targets at 1.2290, 1.2320, 1.2350, 1.2380 and 1.2430 for 170+ pips profit. That trade might need a little breathing room as bears are likely to fight it. If we do see a sustained break below 1.2150 on the 1h charts or above then that is a very bearish signal and we could be looking at 1.2000 tomorrow. An aggressive trade is a sustained break on the bullish break of the falling trend resistance (the blue line my circled dojis are barely touching)
Sign up for free forex signals via email here
FAQ on these signals
Forex Candlestick Alerts
Forex Income Calculator
Forex Market Hours