Article originally published on innerfx.com and republished here with permission
Quote of the day:“The inability to predict outliers implies the inability to predict the course of history” ~ Nassim Nicholas Taleb
Good morning. The euro enjoys a rebound as a result of world markets starting the week strong after France and Germany pledged to deliver a plan to support the banking sector. Trichet’s speech is the main highlight of the FX Calendar today.
Correction is still underway and it seems that it’s not ending yet, therefore recent top around 76 is where to look for next support
There are no signs of weakness yet so it’s best to wait if you’re looking for selling opportunities. On the other hand, recent rally was quite strong so there’s a good chance that support around 1.3550 will hold for now, so either buying dips or on a break above 1.3680/00 could be a good idea
Yesterday’s plan to buy on strength is still valid as cable holds gains near resistance and it seems that a breakout is likely
Correction or not – it still feels heavy as expected and Friday’s pin bar proved to be a false signal for the bulls, as price continues to push lower, now testing interim support – as seen in the 4-hrs chart below
The Aussie dollar setup looks good, too: parity level is currently providing resistance and a potential break should provide yet another opportunity to join the bulls on this recovery run.