With the above trade ‘done and dusted’ where do we go from here? Well, despite weekly action currently occupying a major weekly at 1.1533-1.1278, there’s a chance we may see the single currency bounce north today/tomorrow. Not only is price now trading around the above said H4 mid-way support/H4 support region at the moment (bolstered by a H4 completion point just above it around the 1.1262ish range), there also the nearby daily at 1.1224-1.1104 to consider. These supports were, as we mentioned prior to closing the above short position, the fundamental reasons for taking profit where we did.
Our suggestions: Although our team took profit we’re not going to be looking to buy just yet, due to the monstrous weekly currently in play, which has capped upside since May 2015! With this, one may ask: ‘well why close your short trade then?’ Quite frankly, the reason is simply because we’re just not sure how the market will respond here and did not really fancy going through another phase of drawdown.
Therefore, given our uncertainty, stepping aside here and reassessing going into to tomorrow’s sessions is the route we’re taking.