5:14a GMT -Yesterday's primary trade, a sell off of 1.3580 held on the initial touch to put pips in our pockets but bulls eventually bullied (you like that? :) there way back up to 1.3650. In all it was a very volatile day with 6-8 candles over 50 pips in length alone. This increase in volatility actually steers me toward a ranging forecast, however, as volatility usually tightens before a major *pop*, like the quiet before a storm.
Daily Outlook: 1.3450 support has been tested three times on three separate days and has held firm each time. Firm might actually be an understatement - every time the support has been touched the pair has raced upward 200 pips! More concerning for the bears though is the two massive dojis on the weekly chart with the now forming bullish hammer. Each time that support holds it makes a retracement more likely as bears may decide to wait for a better entry price higher up as I am now doing. Last hour we had a shooting star on the 1h near 1.3650 resistance but I no longer feel great about getting a good risk/reward from this level so I will hold off, waiting for a shorting opportunity closer to 1.3700.
Trading Idea: Still looking to short as the primary trade, with candlestick confirmation int he 1.3700 area. Targets at 1.3675, 1.3650, 1.3615 and 1.3580. The battle at 1.3580 will be interesting though, and aggressive bull traders will be looking for longs in this 1.3580-1.3550 on a retracement.