Looking over to the H4 chart, we have two potential formations in play:
1. A H4 taken from the high 0.7426 that terminates a few inches below the 0.73 handle.
2. A H4 drawn from the low 0.7328, which happens to complete around the 0.74 handle.
The first pattern is incredibly attractive. Not only does it merge closely with the 0.73 handle, it also sits within the said daily , which itself intersects with the aforementioned weekly support and is beautifully positioned a few pips above the 2016 yearly opening level! Not a bad place to look for longs!
The second pattern is equally attractive. The termination point fuses with the following: a 0.74 handle, a H4 resistance extended from the low 0.7475, a 127.2% H4 Fib ext. at 0.7409 taken from the low 0.7328 and a 38.2% H4 Fib resistance at 0.7415 pegged from the high 0.7556.
Our suggestions: Look for shorting opportunities between 0.7415/0.74, and l longs from around the 0.73 neighborhood.
Data points to consider: US data and Retail sales figures at 1.30pm, FOMC member Evans speaks at 2pm, US Prelim UoM consumer sentiment at 3pm , FOMC member Harker speaks at 5.30pm GMT+1.
Levels to watch/live orders:
• Buys: 0.73 region (stop loss: 0.7275, beyond the daily support area/yearly opening level).
• Sells: 0.7415/0.74 (waiting for a reasonably sized H4 bear candle, preferably a full-bodied candle, to form before pulling the trigger is advised, stop loss: ideally beyond the candle’s wick).