1.10: an ideal platform to short from!

4 mag 2017

Going into the early hours of yesterday’s US segment, the single currency gathered momentum and broke above a multi-day H4 range fixed between 1.0861/1.0950. With the major now seen within striking distance of the large psychological number 1.10, where do we go from here? Well, technically speaking, 1.10 looks as if it could be an ideal neighborhood to consider shorting from. Apart from this level likely being watched by the majority of the market, we can also see that it converges beautifully with a 161.8% Fib ext. at 1.1007 drawn from the low 1.0851. In addition to this, we also have weekly action trading between two 127.2% Fib extensions (red zone) at 1.1016/1.0954 taken from the lows 1.0340/1.0493, and daily price is currently seen lurking just ahead of a trendline resistance extended from the high 1.1616.

Our suggestions: Shorting from 1.10, in our opinion, is a no brainer, since stops can comfortably be placed above the upper 127.2% Fib ext. level at 1.1016 on the weekly chart. However, traders are advised to pay attention to economic news today, as we have some heavy-hitters on the horizon!

Data points to consider: US Average hourly earnings, Non-farm employment change and Unemployment rate at 1.30pm. FOMC member Fischer speaks at 4.30pm. Fed Chair Yellen also takes the stage, as well as FOMC member Evans at 6.30pm GMT+1.