Weekly Trend direction: Bullish
Weekly trend reversal level: 1.4820
Key G7 support levels: 1.4970/80, 1.4940, 1.4880, 1.4820
Counter-trend opportunities: 1.5050? 1.5240
Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.
Today's trade suggestion:
Interesting stuff, as the euro has tested 1.5050 three times, and held above 1.4950 on each occasion. This is a key
level for the euro, and upward momentum has “run out of gas” to an extent. However, with pundits baying for a
dollar rally, don’t be complacent and fooled into thinking that the euro can’t rush higher again this week (Next
stop 1.5240) Support lies at 1.4970/80 and then several layers below, down to 1.4820. Note that the weekly chart
is developing into an interesting “rising wedge” patter, which is highly unstable and will add to the feeling of
insecurity for the long hands. All in all probably an explosive week. How to play it? Perhaps try tiny shorts from
1.5050, or wait for 1.5240 before trying again. Otherwise, wait for dips to support, a clear reversal pattern and a
G7 signal before buying for 1.5050 and then 1.5240.
Summary:
Buy dips to supports at 1.4950/70 after a clear reversal has formed. If this fails then wait for supports further
down. Target 1.5050 and then 1.5240. Possibly try small counter-trend shorts near 1.5050 or 1.5240 after a
clear reversal.
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