Daily Outlook: Here we are finally at 1.3700 (after 3 days of waiting) and, unfortunately the price has drifted so far that the technical picture is not as short term bearish as it once was. The price broke through the hourly falling trend resistance yesterday (a bullish sign) but left the daily trend resistance intact (a bearish sign) which is the top blue trend line on the graph below. We have also had two consecutive days of higher highs and higher lows. Toss the bullish candlesticks we've had the past few weeks on the weekly charts and their is ample reason to be looking for longs. Which leads me to my strategy to close out the week: given the mixed signals as to the trend I will continue to look for short confirmation candles at 1.3700 and (more importantly) at the daily resistance of 1.3740. But I will also be on the lookout for long opportunities in a return to 1.3625 support.
Trading Idea: It is Friday and we do have USD news (check the forex calendar for more details) coming out at 13:30 GMT so conservative trades are my preferred route today. Primary trade is a short in the area of falling trend resistance around 1.3740, with targets at 1.3710, 1.3680 and 1.3645 OR a long in the vicinity of 1.3625 support with candlestick confirmation. Bull targets from there are 1.3650, 1.3680 and 1.3710. A more aggressive trade (not my cup of tea on Fridays) would be a short at 1.3700 with targets down to 1.3600.
Happy trading today PipHutters and thanks for being such a great community to work with!