Weekly closing price: 1.1662
Over the course of last week’s sessions, the single currency managed to recoup some of its recent losses. As can be seen on the , this has positioned the unit within striking distance of a resistance line pegged at 1.1714. Boasting a reasonably strong history, we feel this line will very likely cap upside this week.
On Tuesday, daily price came within a few pips of shaking hands with the top edge of a demand base seen at 1.1479-1.1552, which happens to be sited just ahead of the aforementioned weekly support. Cleary managing to attract the attention of the buyers here, the euro spent the remainder of week clocking fresh highs. According to the , the sticks could continue to advance this week as the next upside target does not come on to the radar until we reach the channel resistance etched from the high 1.2092.
For those who follow our reports on a regular basis you may recall that in last week’s weekly report the desk underscored a prospective buy trade from a H4 demand area penciled in at 1.1541-1.1570. Our buy order was filled at 1.1567 amid the early hours of Tuesday’s segment, and the stop-loss order was positioned a few pips below the aforesaid H4 demand area at 1.1540. As 1.16 was touched on Wednesday, our first take-profit target, the team decided to reduce risk to breakeven here and bank some profits. Thursday’s advance, however, brought the unit up to our second take-profit zone: November’s opening level at 1.1651. Further profits were banked at this point and the stop-loss order moved up to 1.1595.
Suggestions: Going into the new week, we intend on holding our current long trade as on Friday the H4 candles eventually conquered November’s opening level. We have also moved the stop-loss order up to 1.1621. Positioned a few pips beneath weekly resistance at 1.1714, we decided that the 1.17 handle will be the final take-profit zone for this trade. With it being a nice-looking zone to sell it makes for a strong final target.
Should you have missed the initial long call, and also the second opportunity to buy on the retest of 1.16 on Thursday, you may be given a third opportunity to catch some of the move if H4 price retests 1.1651 this week. From here you could drill down to the lower timeframes and search for an entry, targeting 1.17.
Data points to consider: FOMC member Harker speaks at 12.10am GMT .