Trade view /
29 June 2016 at 7:12 GMT
USD Index: The long-term bias remains bullish. However, with bearish divergence seen on short timeframes (thefour and six-hour charts), there is ample scope for a larger correction today. The prime long entry area is 95.50-95.35. This would also close the gap that has been left open at 95.67. We look to buy dips.
The prime short entry for EURUSD is seen at 1.1220-25 and here is why:
Monthly: We are bears with parity (1.0000) our main focus. This is a Fibonacci confluence area and close to the base of the bearish channel. We have also posted a bearish Outside Bar in May.
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Source: Saxo Bank
Weekly: The major currency pair has been broadly confined to the weekly Ichimoku cloud for the last 16 weeks. This week’s selloff has stalled close the base. We are in a consolidating triangle formation that has an eventual bias to break lower. Trendline support is seen at 1.0580.
Daily: Broken out of the expanding wedge to the downside but levels under the 127.2% extension of 1.0962 have found buyers. Reverse trendline resistance is now seen at 1.1143 (we will place stops above).
Intraday one-hour: Consolidating after the strong impulsive move lower on Thursday night/Friday morning. The window from Friday's close to Sunday's open has now been closed (1.1083).
Intraday trading should be mixed while we hold within this triangle pattern. We have the trend of lower highs coming in at 1.1122. Bespoke resistance is at 1.1120. This is our prime short entry area. The two hour Ichimoku Cloud should also offer some resistance
Management and risk description
A move through 1.1035 and we place stop at entry.
Entry: selling at 1.1120-25.
Target: 1.0780 and 1.0580.
Time horizon: today to trigger, estimate seven to 10 days for targets.
— Edited by Michael McKenna
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Non-independent investment research disclaimer applies. Read more