Quick note on the website: I did some server upgrades this weekend so if anything is acting differently please let me know by submitting a help ticket. Also I've added various time periods to my charts so you can clearly see what timezone my charts are in (I get a lot of questions on that).
Daily Outlook: The rising trend (bottom blue line on chart) is still being respected - a bullish sign - as we just had double bullish candlesticks on the 1h charts: an inverted hammer at the 0:00 GMT hour and a hammer at the 1:00 GMT hour. See the candlestick alerts here for more details.
Technically the pair appears to be forming a lumpy head and shoulders reversal pattern in this short-term uptrend. The neckline of this formation is 1.2450 and a sustained break below this opens up 1.2400 and 1.2350 in the short-term. Meanwhile on the top-side a sustained break of 1.2630 could open up 1.2680 and 1.2750.
Fundamentally we have very, very little news tomorrow save for the USD existing home sales report at 15:00 GMT. See full forex calendar here for the details. But, with all the talk of Greece and the Eurozone we could see another country drive up the USD and continue the EUR/USD downtrend: North Korea. That's right, South Korea completed its investigation last week of their sunken naval vessel and concluded it was a North Korean torpedo that sunk it. They even went so far as to release a quote saying that North Korea was going to pay the price. As the war of words heats up we could see a flight to safety in the USD.
Trading Idea: My primary trade is to sell a sustained break below the 1.2440 (the neckline) with targets at 1.2410, 1.2385, 1.2355 and 1.2315 for 125 pips profit. A much more aggressive trade would be a long on a sustained break above 1.2620 (on the 4h) or 1.2630 (on the 1h) targeting up to 1.2750 for 130 pips. I would much prefer the short opportunity here as the long-term trend is still very bearish, and looking for opportunities to short in general is a decent strategy here.
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