The break above the 1.18 handle placed the H4 mid-level resistance at 1.1850 in sight. Yesterday’s push higher has also ‘confirmed’ buyer interest from the daily demand pegged at 1.1712-1.1757. Continued buying from this area will likely see the candles shake hands with daily resistance at 1.1878. Over on the , the weekly at 1.1880-1.1777 is now back in the fight, despite dipping to lows of 1.1717.
• Long: A retest of 1.18 could provide traders a platform to buy. As most are aware, though, psychological bands are prone to whipsaws. Therefore, a fakeout below 1.18 into October’s opening level mentioned above at 1.1788 is a strong possibility, so do be prepared for this! Should one manage to pin down a long from 1.1788/1.18, the first take-profit target could be set at 1.1850, followed closely by the daily at 1.1878.
• Short: All three timeframes point to further buying.
Data points to consider: French flash manufacturing PMI at 8am; German flash manufacturing PMI at 8.30am; Euro flash manufacturing PMI at 9am; ECB press conference at 1.30pm; US retail sales m/m and weekly unemployment claims at 1.30pm GMT .
Areas worthy of attention:
Supports: 1.1722; 1.18 handle; 1.1788; 1.1880-1.1777; 1.1712-1.1757.
Resistances: 1.1850; 1.1878.