Trade of the Day: EURUSD To Test 1.1430/50 Symmetry Target
Trade of the Day: EURUSD TO Test 1.1430/50. ECB’s Coeure: ECB aims to protect EZ from being the victim of global slowdown, will do more if we need to get inflation higher. EUR is caught between the ‘safety bid’ and ECB rhetoric. Market expects the ECB to continue to attempt to cap EURUSD topside, but that still leaves the pair vulnerable to risk sentiment flows. According to interbank reports one off flow seemed to be to blame for the move lower in Euro initially as we saw a quick move back above 1.12 in quiet trade yesterday. Liquidity seems to be exacerbating moves with China out for the week. With Yellen coming up on Wednesday we should more or less stay within the recent range for now with a small bias to see positions tapered back through 1.1230/50. Interbank reports suggests short term positioning is fairly light for now although medium term players are still short.
Technical: While 1.1050/30 remains intact as support expect rotation through last weeks highs en route to test 1.1430 symmetry objective. Below 1.0950 suggests false upside break and opens retest of range lows.
Trade Idea: I am monitoring price action in the EURUSD anticipating a topside thrust to test the symmetry objective at 1.1430/50, here I will be monitoring intraday reversal patterns to set shorts targeting a move to retest the base and breakout level at 1.10 with protective stops placed above 1.15 highs.
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