G’day Surfers – another day, another day under pressure for EURO.
Whipsaw Wednesday was pretty close to an apt description of EUR/USD’s behaviour yesterday. Those who trade Asia Session displayed a knee jerk reaction to the Obama victory, buying EURO in a hurry. When the big boys went to work, they would have none of that and sent EURO straight back to the cellar door and beyond. Whilst we were certainly not interested in trading Long, the freefall was too fast and didn’t provide us with a safe entry so we stayed flat. Oh, did I mention that Greece have decided to adopt the latest round of austerity measures? Market didn’t seem to care – their people will and you have to feel for them.
So where were we 48 hrs ago, before we were so rudely interrupted by a little vote or two? Yes, that’s right, EURO was under pressure………AGAIN! Having broken the six week old consolidation to the South, EURO looked set for a substantial crash and appears to be on that precipice once again. Pivots remain Bearish with daily sneaking a little further away from it’s partner in crime, Weekly. That gap is now around 100 pips and approaching the point where it becomes a concern – but not quite yet! With Daily Pivot untested and a double bottom (reversal pattern of the year) on smaller timeframes, I can see Price Action testing the waters Long, before resuming the EURO sell off.
The Day Ahead
Plan A will be using the Hotspot (provisional at this stage) I have as Support and playing a False Break to capture the pips available between Daily Pivot & entry. Should Price Action produce a Resistance line for me to play the same trade – I’ll accept that also. This may suggest I’m Bullish EURO – I’m not! I am more than happy to look for a Short entry but I’d really like a DP test prior. Of course the Interest Rate announcement & ECB Press Conference may have a stalling effect on Price Action prior to them holding centre stage later in the day.
High Impact News
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ECB Press Conference