Daily Outlook: The e$ is stubbornly climbing higher, pip-by-pip and it almost near the top of its 4h/daily channel as shown below:
The bull's progress has been slow however and technical indications are that the pair is losing steam ahead of the falling trend resistance found @1.4350 on the 4h and daily charts (top yellow line on chart above). There is also an aggressive rising trend support under the most recent upward spike, shown with a blue line on the chart above. A break of this level will trigger an aggressive short for us targeting the bottom of the channel.
Fundamentally the markets are still rudderless and trying to figure out if there is enough confidence in the markets drive risk assets / currencies (such as EU) against safe-havens such as the e$. On risk aversion look for the dollar to gain against the euro and on risk-on (e.g. if stocks were to rally) then we expect the euro to gain against the buck.
Trading Idea: Primary trade is a short under 1.4350 with strong candlestick confirmation and targets at 1.4325, 4300, 4270 and 4240 for 110 pips potential. We will probably keep a lot open though for a chance at 1.4100 as the 4h charts look pretty bearish.
There is also an opportunity for an aggressive short on a sustained break to the downside of rising trend support (blue line), currently at 1.4300 and targets at 4275, 4250, 4225, 4200 and 4170 for 130 pips potential.
Happy Pipping :)