There is a very pronounced W-Formation reversal pattern happening on the daily chart of this currency pair. Entering after the close of today’s candlestick will be very timely if you are a swing trader and if you are 5-30 min chart kind of a trader, look to buy at all lows today.
The reason I’m confident for this pair to probably rally is the behavior of the stochastics in the daily chart time frame. Look at how the support line drawn from 18.11.2016, 20.12.2016 and 03.01.2017 lows hold when stochastics are oversold. Check out at these given days when price bounces from support it rally for a minimum of 12 trading days. Yesterday there was a double bar reversal pattern which was confirmed today with that bullish candlestick which easily broke above resistance trendline drawn from 07.12.2016 and 28.12.2016 highs. Previously I also mentioned on how volumes play a part in these momentum trades, the more the volumes in either direction the more likely price is going to trend in that direction and right now the OBV indicator points to increasing volumes.
Trade plan for today is to buy when there is a retracement back to the resistance trendline which was broken earlier today in the Asian session with entry in the 1Hr chart. Trend resumption levels in the 1HR chart will likely be at the most recent resistance at 1.0725 and therefore we shall trade as follows with an oversold stochastics in this time frame:
Buy Limit: 1.0725
Stop Loss: 1.07
Take Profit: 1.0810 which is the clearest support turned resistance in the daily chart.
I would like to know about your thoughts in the comment section. Thanks.