On the daily chart the pair has spent the last couple of months consolidating within a well-defined triangle formation. On Friday it moved down to the bottom of this after the US dollar got a boost from the Bank of Japan’s decision to cut interest rates – taking them into negative territory. 

This oblique support also coincided with a key horizontal level at around 1.0800, which has held fast several times before, including at major lows last May and July.

On the 4 hour chart, the price action has begun to rotate decisively higher from the intersection of these levels, forming bullish long-tailed candles. This upwards momentum will continue for some time, according to Alex, and given the opportunity to set stop losses below two key levels of support, the risk/ reward set up looks attractive he believes. His first target would be the roof of the triangle formation at around 1.0970, and even if this isn’t reached he plans to be looking to exit our position well before Friday’s non-farm payroll data.