Daily Outlook: Welcome to March PipHut! No signal yesterday as the end of the month volatility is to be avoided whenever possible. Today we find ourselves again challenging 1.38600 - a strong resistance level from early February:
As shown on the chart above there are two key levels that we will be watching: 1.3860 and 1.3720. In the 3840-3860 resistance zone we will be looking for bearish signals to enter short on, and in the 1.3720-3750 support zone (intraday support that has held twice now in the past few days) we will be looking for opportunities to get long.
On a break above 3860 we will look for the eventual march toward 1.40 to continue, and a break below 1.3720 will open up a re-challenge of the rising trend support at 1.3600. There is a mixed bag of news today, including a speech by Bernanke around 15:00 GMT that may jitter markets so say sharp. See the full news calendar.
Trading Idea: Primary trade is a long ON A DIP to 3720-3750 support zone with good confirmation and long targets at (from 3720) 3745, 3775, 3800 and 3830 for 110 pips. For those using CP make sure to check backtesting for high-probability target zones and TP/SL levels.
We are not big on going short at the moment (market is bullish), but 3860 is strong resistance and will be on the lookout for STRONG bearish confirmation if we see a RALLY to 3860 for an opportunity get short with targets at 3835, 3805, 3780 and 3750 for 110 pips.