Possibly adding additional strength to weekly buying, daily action also recently crossed above a daily resistance at 1.3878. This, in our book, signals further upside could be on the cards today/next week.
Before higher prices are possible, however, H4 movement will need to chew through the 1.39 handle, which provided resistance amid yesterday’s US segment. The long H4 wick printed on Wednesday marked with a green arrow at 1.3942 has potentially wiped out the majority of sellers around 1.39 and trapped a truckload of breakout buyers, thus, in theory, this should be a relatively easy level to overcome.
A decisive close above 1.39 today, followed up with a strong retest on H4 timeframe, is, we believe, enough to warrant a buy. Take-profit targets would be set at the 1.40 handle, and then finally around 1.4079: the weekly broken Quasimodo level mentioned above.
Data points to consider: UK retail sales m/m at 9.30am; US prelim UoM consumer sentiment at 3pm, followed by FOMC member Quarles speaking at 5.15pm GMT .
Areas worthy of attention:
Supports: 1.38 handle; 1.3878.
Resistances: 1.39 handle; 1.40 handle; 1.4079.