Daily Outlook: We got our clean break of rising trend support (yesterday's secondary setup after the primary failed to provide any bullish confirmation) on the 09:00 candle. All targets were hit for a quick 100+ pips. Yesterday's support we were trading is shown in orange below:
Side note: notice the big bump or accelerated rise in the pair before this recent bearish break. These can be difficult to spot as they develop (as many trend changes are) but many technicians would consider that rise to be an exhaustion rise as the support lines you would need to draw to keep up with that continued to increase in slope and, therefore, were unsustainable on a long-term basis. Of course more confirmation than that is needed, in our opinion, which is why we waited for the break of intraday rising trend support to confirm the short trade.
The pair may be forming a giant SHS pattern (with a giant head - more like a sombrero :) but the positioning of it on the 4h charts takes away from its value a bit; we will continue to watch it over the next 24 hours.
Trading Idea: Today we are once again tracking an S/R line - this one the blue falling trend resistance on the chart above. We will look to get long on breaks above this resistance, currently at 3620 and dropping, with targets at 3640, 3670, 3700 and 3730 for 110 pips profit. We will keep our SL tight and watch carefully around the 3650 resistance mark for signs of reversal as this is the top of where the right shoulder should be, and because we are still fairly bearish on the pair which leads to our secondary trade:
Shorts below this falling trend resistance line with candlestick confirmation, currently at 3600 and falling, with targets at 3580, 3555, 3525 and 3500 for 100 pips profit.
Happy pipping all!