Although the 109.50 neighborhood is a tempting position to enter long from, it might be worth noting that daily action recently broke through support at 110.58 and now shows room to extend down to demand plotted at 108.55-109.17. Also of note is the weekly chart. The at 111.44-110.10 has recently been breached. In the event that a close is seen beyond this zone, this could lead to a move down to the logged at 105.19-107.54.
Our suggestions: We confess that we absolutely love 127.2 extensions! But trading against higher-timeframe flow is never nice. In order for us to be permitted to enter long from the 109.50 region, a reasonably sized H4 candle is required. Of course, this is by no means a guarantee that the trade will pan out. What it does do though is indicate buyer intent off of a high-probability level.
Data points to consider: US import prices at 1.30pm GMT +1.