At the moment, the Euro depends on any comment from Draghi that would either touch on Brexit or any further quantitative easing. Remember last week we had Draghi speech after the committee decided to keep EU interest rate unchanged and many people were actually waiting for any mention of further asset purchase and even “tapering” to include riskier assets in their portfolio. Draghi didn’t mention anything about this and the Euro tanked through Friday, only showing some recovery yesterday.
From the charts, immediate regions of support comes in at 111.00 and 112.30, these areas have proven to be areas of buying in recent months with 111.00 coming in as the second lowest price after Brexit. Price action has been showing continued strength after that especially in the daily chart where oversold stochastics and price rebounding seems to be at confluence with these support zones.
In my opinion, I think this is a good time to buy especially now that the resistance trend line of that narrow bear channel in the 4HR chart has been broken with strong bullish momentum from the stochastics. Further, in the weekly chart, there has been bullish momentum developing and higher lows relative to the lower BB evident.
I recommend patience now and wait to buy in the 15 min chart once there is an oversold stochastics at or near those support levels marked in the attached 15 min chart. Therefore, trade as follows:
Buy Limit: 113.30
TP: Trail your profits, or aim for 1:3 risk reward ratio for scalpers
Buy Limit: 113.15
TP: Trail your profits, or aim 1:3 risk reward ratio for scalpers
Otherwise, watch out for German IFO business climate at 0800HRS GMT and Mario speaks at 1530HRS GMT. That speech will be important.
Have a good trading day.