The power of our DCZ’a was underlined yesterday as finally, a decent pullback arrived for EUR/USD which bounced perfectly off DCZ 1.2510, straight to its northerly DCZ neighbour of 1.2645. The beautiful irony of that being that I was speculating about its Southern sibling being the next stop on the slippery slide. Apart from our DCZ, the buying came without warning and began as Asian markets opened for the week and stopping only when the 1.2645 DCZ resisted. Our only order, a Short, was ignored by PA.
With decent pullback finally arriving, the game becomes more interesting as the ‘R’ word gains in popularity. In the absence of a chart pattern, I’m thinking Reversal calls are premature. Interestingly, two thirds of an inverted head and shoulders has formed! Certainly the Pivots are now mixed, suggesting a directional stand off and as per yesterday, I still see space underneath EUR/USD. The next few sessions will be very interesting and perhaps a little tricky. Daily Pivot is guarding sub 1.2600 admirably so far today and whilst that remains the case, more buying might just be possible – look out below it however.
The Day Ahead
DP is the key today so I will watch what happens around it very closely.
High Impact News
Still nothing yet this week.