Recommendation: BUY
Current Trend: Short- and med-term up. Long-term sideways to up.
Strategy: Buy at current levels. (More conservative traders players buy a close above line 4).
(Daily)
Chart Setup: The euro has pulled back over the past week as expected and has found support at line 2. Line 3 is now a support level, and it forms a channel with line 4. The price is likely to break out to the upside. Overall, there is still a higher target in place from a 2½ year sideways range.
- Its short-term Stochastic is nearing its oversold region so there is the potential for a euro rally here at any time. (It seems to have begun).
Strategy Details: Buy at current levels. (Conservative traders can wait for a close above 1.2070, line 4, to buy).
Target: A close above line 4 (1.2070) will point to 1.2320, based on channel 3-4. Take most trading profits there. (In the meantime, lock in partial profits e.g. a third, near line 4 to reduce your risk).
- Over time, the main target is 1.2400 at least, and that is a conservatively measured target. It could go as far as 1.2700.
- Short-term support is line 3 (1.1820). Line 2 is still holding, at 1.1850; and key support (line 1) is at 1.1710.
Stop-loss: A close below 1.1820 for the short-term. From 1.2150 bring the stop to breakeven (entry). And from 1.2250, raise the stop again to a breaking of its prior two day low as a trailing stop for short-term traders.
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