The euro broke lower overnight and hit 1.2361 support. This was the previous reaction low on the 7th of November and therefore all short positions have been covered. Now there's a Double Bottom in place, and given that we have traded lower to this important support, there is scope for
a correction early in the session.
We have the daily pivot at 1.2443. This ties in with chart resistance and also the short term 38.2 Fib level, so we could see rallies extend to here this morning. We would be looking to cover any longs and resell a bounce to these higher levels. The 4-hourly time frame chart is showing that we are oversold and beginning to turn, so we need to keep our eyes on this one. And if we can trade above 1.2445, look for further correction with a possibility of reaching 1.2540/70 once more. This should be the top, therefore we put shorts in place, looking for another leg lower. We still have trendline support at 1.2231 from the weekly charts. A sustained break of 1.2360 would push us lower to this support zone.