4:14a GMT - Quick to note to everyone that the economic calendar is back up and running if you check it to avoid event risks. Nearly a picture perfect trade yesterday as the pair came right up underneath our resistance at 1.4030 (hit 1.4025) and, if you were awake and watching, gave a nice long wick before dropping like a rock. All 3 targets were hit for 130 pips profit.
Daily Outlook: As expected yesterday the confluence of multiple layers of resistance and the 23.6% fibonacci retracement level gave bears (who have been in firm control since December) a reason to sell again and the pair dropped swiftly. The pair continues to be extremely bearish on nearly any timeframe you look at including the 60m, 4-hour and daily. As such I will continue to look to sell rallies near resistance and I'm looking at two levels this morning: 1.3960 (the 61.8% retracement of yesterday's drop) and, if that is broken, 1.4030 once again.
Trading Idea: From 1.3960 short targets are 1.3930, 1.3900 1.3865 and 1.3830. From 1.4030 I'll use the same targets as yesterday's signal. Also, for a secondary trade I would sell a sustained break of 1.3830 as this opens up 1.3800 and 1.3755.