The failure to immediately sustain gains above 120.00 suggests that this pair is going to stay true to form and, while it will probably work its way higher, it will do so in stages. We have been in an extensive consolidation pattern below 131.00 since October last year and, with the prospect of a medium term base now at 112.05, an eventual return to 131.00 is favoured. Short term trendline support now comes in around 116.00 and that is the preferred entry level. If you are worried about leaving very wide stops, reduce the size of the position at first and this will allow for a more stress-free entry into the trade.
