The Euro has formed a Inverted Head and Shoulders formation on its Weekly and Daily chart and has completed a downside correction of the 1.2036-1.3182 ascendent wave after the price has been rejected at the Fibo 50.0 level at 1.2625 following a 3 week decline.
The price currently holds below both its MAs and further upside is expected up to the resistance confluence area of the 1.3498 level, the 200 period MA and the faster MA.
On the Daily chart the price advanced higher inside its uptrend channel after being rejected at the channel's ascendent support and currently holds above both its MAs as it entered the 1.2808-1.3129
Our trade setup consists of a buy at 1.2857 with a stop loss at 1.2714 below Fibo 61.8 of 1.2036-1.3182 and below the channel's support and its faster MA and a target near the top of the range at 1.3094.
On the H4 chart the Inverted Head and Shoulders has sent the price higher above the 1.2836 resistance and above its faster MA while it approaches for a test of its 200 period MA inside the 1.2836-1.3145 range.
Our trade setup consists of a buy at 1.2865 with a first target of 1.2968 near the middle of the range and above the R3 pivot and a second extension target at 1.3107, slightly higher than the Daily target,
while a stop loss can be placed at 1.2784, below Fibo 38.2 of the ascendent wave.
Note however that retracements lower of the Euro are expected before signifcant upside is resumed and the targets will be reached.
The stop loss levels are relative and can be hit as a result of short-term price spikes/swings from news or other events which will not affect the medium-long term targets which are the objectives of those trades.
Goldenschild Asset Management