Morning guys,
Today will be extremely intersting session. Here is why. Technically, situation on EUR looks bullish. We talked about it yesterday - on daily it looks like big bullish engulfing pattern, which theoretically should lead to upside continuation. But this is only on surface.
First is - we've got bearish grabber, that we've mentioned yesterday. Second one and most important thing - recall the background of this rally on EUR. When you try to find something important - you can't do this, because this is nothing. What we have - some relief in HK unrest, new spiral of US-Sino tariffs talks in October. That's all. Nothing important. This is the reason why I do not want to buy EUR today, although technically we should consider this setup.
The dark side of the moon is - good recent ADP report, coming EU GDP and NFP today, overall strong long-term bearish EUR background. This is the reason why I would prefer to sell, based on the grabber... This is risky because you have to sell against short-term upside momentum. So, if you're conservative trader - do nothing, wait for data and take action on next week, when we have all information.
Another negative side of this "Sell" trade is high dependence on data. If it will be not good or bad enough, reaction could be muted. So, this trade potentially is rather risky. But if everything will happen as we expect - you will get position at best price.
On 4H chart EUR was not able to break above the MPP and 5/8 level and now is coiling around WPP as well. Here grabber takes the shape of bearish engulfing pattern:
On 1H chart is our trading setup. It is simple - taking position at upside retracement of the grabber. Another advantage is tight stop - you do not need it to place too far. Alternitavely you could use Stop "Sell" order on breakout of 1.10-1.1025 area.