Daily Outlook: Technically the trend is still bearish and so, of course, I will look for selling opportunities. Yesterday was extremely bearish dropping over 170 pips from open to close. We currently find ourselves hovering above the 1.2140 support though and a failure to sustain a break beneath this level could open up a bullish correction to 1.2500.
We have some important US news coming out tomorrow - the GDP and the Initial Jobless claims at 13:30 GMT. I don't trade news but I stay out of the markets when things get choppy around news events (usually at least 30 min on either side of news). Check out the forex calendar for more details on these two events.
I also want to point out (as I did a few days ago) that 4h hammers and shooting stars (on GMT charts!) have been very accurate at predicting the short-term trend of late. I circled them in orange on my chart below, but if you followed nothing else you would be up at least a thousand pips just in the past couple weeks.
Trading Idea: My primary trade is a short on a rally to 1.2300-2340. From 1.2340 short targets are 1.2310, 1.2285, 1.2255, 1.2225 and 1.2190 for 120 pips profit. My secondary trade will be a sustained break (on 1h charts) of 1.2140 to the downside with short targets down to 1.2030 for 110 pips profit.
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