ECB President Mario Draghi long awaited remarks were followed by more EUR weakness yesterday. The forex market will get more interesting from here. USD strength remains the overall trend – in my opinion.
It’s not unusual to see a bit of profit taking before the weekend or at the beginning of a new trading session.
The UK had a positive retail sales release early in the session and although price dipped – it could not close below the Asian lows. Overall a very subdued move in the cable today. Just in advance of the US traders beginning their session, a bullish candle closes above yesterday’s low. An entry is taken as there are no pending major US economic news releases.
With only four hours left in the session, we will take a 2:1 R/R with our target being the Asian high. Price begins to move up bullishly when a potential reversal setup occurs mid Asian range. We protect ourselves by moving our initial stop loss to a plus 3 pip profit stop. We continue to move our profit stop up as price makes its way higher. In advance of the UK close we exit the trade at the Asian high where the momentum has failed to take the pair higher.