Looking at this currency pair, it’s my opinion that the USD rally just began. Technically, from the monthly chart the support trend line has done its job of keeping price action from breaking below 13.29 and somehow, the 20 month moving average has acted as support and perfectly complemented the support trend line. I will expect price to trend higher in the coming months as Trumponomics kick in with expectations that there will be growth in the 4rd quarter and inflation is going to tick higher next year. Also, from Yellen’s speech, labor conditions and manufacturing has expanded and is expected to inch higher even in the next coming months which are overly supportive of the USD.
I’m a USD bull and this is why I will look to go long and enter in the 1HR chart. The weekly and daily charts stochastics are both oversold and already a buy signal has been printed. There is increasing number of investors long on the USD and therefore look to trade as follows tomorrow in the European session once there is an oversold stochastics and a buy signal printed in the 1HR chart.
Buy Limit: 13.95
Stop Loss: 13.85
Take Profit: a risk reward of 1:3 is ideal put I advocate holding this for at least 3 months or until a sell signal is printed by the monthly stochastics.
Otherwise have a good trading day.