So we bounced at .7745. Here are a couple of numbers I am watching. .7873 which is a weekly s/r level and and .7883 which is a 38.2% fib retracement. Looking at the April candle, price action suggests a reversal at the .8000 - .8100 area, So I'm looking to sell rallies.
I just realized I am long this pair in one account and short in another account. Both the trades could play out and make a profit, believe it or not. Different time frames, you see. Yet somehow experience is telling I doubt that will happen.
Price is now trading below the last 7 day closes. If today closes below .7860 then those days of consolidation will form strong overhead resistance. The consolidation forms a box which gives me defined levels of risk. A break out from such a box is reasonably high probability to go to 3 : 1 using 2/3 of the box as risk.
The other interesting thing about the box is the possibility it forms a right shoulder for the February 2016 highs. A strong close below .7734 would validate this head and shoulders formation. The technical target will be around .7380, but I find the trip down off the right shoulder is always a good place to start. Risk reward around 1 : 9. Not too shabby and definitely worth watching. Chart:
Attached Image (click to enlarge)
I'm going to risk some of Wiggy's beer fund on this trade. I don't think he'll mind.