3:35a GMT - I stayed out of the pair most of the day, brushing aside the fact that the more aggressive call yesterday (short at 1.3580) would have produced nice pips with my usual 40-50 pip stop. But my secondary setup (A secondary setup is a sustained break of the lower rising trend support which I would look to produce a challenge of 1.3450) was triggered about 4 hours ago and quickly produced the pop I was looking for, quickly putting 50 pips in my pocket.
Daily Outlook: Falling trend resistance (top blue line on chart below) continues to hold strong and cap any bullish advances. This break below 1.3500 is another bullish signal and the lowest daily close for the week, but ultimately we want a close below 1.3440 to confirm the continuation of the downtrend. 1.3450 is strong support and I will look to fade rallies that target this level.
Trading Idea: Primary trade is to look to fade rallies into the 1.3550-1.3580 resistance zone, with targets (from 1.3580) at 1.3550, 1.3520, 1.3490 and 1.3455. A more aggressive trade would be a candlestick signal at 1.3500 resistance. I would feel best about this one if price action took several hours to get up to this level, meaning bears didn't have much strength. Finally a sustained break of 1.3450 should target 1.3410 and 1.3380.