Spending a week away from the markets (as I have) has served only to re-enforce my thoughts that EURO is STILL, yet to find a bottom. The back end of last week clearly displaying that the prevailing reversal signal (inverted head & shoulders) is not the force it once was. Having said that, the shoulders remain intact so maybe I’m a little premature in writing a rally off?? In fairness, EURO rallied some 52 pips off the daily low of 1.2241, to close the week
off 105 pips.
As above, the influence of the inverted H/S on both Daily & Intraday charts has not been violated, yet our Pivots are now in perfect Bearish order. I would go so far as to say the best alignment I have seen for some time. This of course means we enter short as soon as we open the charts – right? Not quite that simple – is it? A couple of problems with that scenario…..1) Daily Pivot is untested since Thursday, above price Action & …….2) The H/S situation above.
So, we need Price Action to remove these obstacles for us by firstly giving the Daily Pivot a nudge and secondly, taking out the right shoulder of the bullish signal. With both these missions accomplished, the road for the Bears, is all downhill.
The Day Ahead
The likelihood of a Closing Ceremony type hangover this morning, combined with a very flat news day, has me believing London Session could be a bit of a yawn fest. The presence of a couple of decent hot spots has me hoping that’s not the case and I’m quite keen to get short if the opportunity arises. Satisfying both technical requirements above might be a challenge however and I may have to compromise one for the other, in which case a reduced stake will be utilised.
Congrats to you Londoners for a great show by the way…….happy days.
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