Attached is the 4H chart for EURUSD. Yesterday, i had mentioned that a lot of pairs were moving in unison and looking to break out of long term resistances and supports. 3-4 hours after writing that article, a curious thing happened. Many pairs did manage a small break through but after a couple of hours they fell back into the range. This can be clearly seen in the attached chart where there is a break through resistance but the close of the bar was again within the range.
The same curious thing happened with USDCAD as well. This was enough sign that the break through was false and also enough sign that it was a good time to short, which we did and we got 122 pips out of the EU short.
Now, again, we are back into the range and this fall down has been a nice retrace. Since the fall yesterday, there has been a nice bounce from the support area at around 1.4140 and now we are in the middle with this pair thinking what to do next. I believe that this range would continue today and what i have been saying for the past week or so continues today as well, buy dips. This retracement has provided a nice opportunity to buy this pair.
For today, on the downside, there is strong support at around 1.4150. Any hard break of this price would lead to 1.41 and then 1.4060. On the upside, there are resistances at 1.42 and then at 1.4250 and then 1.4290. Play this range with bias to the upside. Any break of 1.43 should be a sure sign to go long or add to longs. Any break of 1.4060 would be a sign to short.
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