Daily Outlook: Another good day yesterday as our buy from the 1.3750 range was good for 100+ pips. Right at the bottom of the 1h channel (light blue line on chart below) we had a 1h hammer at 03:00, followed by a 04:00 4h Bullish Engulfing 'triple' CP signal.
While we closed that trade yesterday for solid profit, we did reopen a long a couple hours at 3860 after a solid Three Inside Up pattern appeared on the 1h charts. 3860, which had been rock solid resistance for a few weeks, is now the tip of our support zone and we will remain bullish above 3860. There is an opportunity to sell on a break below 3850 but we consider this trade to be fairly risk as the trend is up and would instead prefer to wait for opportunities to buy again near the bottom of the channel around 3770.
Trading Idea: We are currently long from 3860 (around current price level) with a very small position (single lot) as this is a bit of a riskier setup. Targets at 3885, 3910, 3940 and 3970 for 110 pips profit.
A more conservative trade would be a long near the bottom of the channel ON A DIP to 3770, with targets all the way back up to 3880 for 110 pips.
As mentioned in the daily analysis above there does exist an aggressive setup to short on a break below 3850 with expectations the pair will continue falling to the bottom of the channel around 3770 - but we will not be taking this ourselves as we prefer to look to go long in this very bullish market.