Daily Outlook: The bulls made a major push upward on Friday finally breaking out of the bearish channel we had been in for the past two weeks (orange channel below). Even though the bulls made a big push to end the week I am still bearish for a couple technical reasons: 1) the push itself started to lose steam under 1.3400 and in fact kicked up several bearish candlesticks on the 4h charts (long wicks, shooting star, etc.); 2) on the daily chart Friday failed to close as a bullish engulfing candlestick despite the bullish surge, indicating weakness.
Trading Idea: The key level I will watch today is 1.3400 - I will look to short failures below this level and buy sustained breaks above this levevl. A short from 1.3400 will have targets at 1.3375, 1.3340, 1.3315 for 85 pips profit. A long above 1.3400 will have targets at 1.3425, 1.3450 and 1.3485 for 85 pips profit. A secondary trade would be to buy a failure around the 1.3315 or (more conservative) 1.3270 support.
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