We don’t trade during US or UK Bank Holidays for two main reasons: Poor liquidity and unpredictable volatility. The 40 pip range through London & New York’s trading hours yesterday is testament to that policy. It’s as if buyers waited until the NZ Market opened after the Bank Holiday, before pouncing on EUR/USD, sending it skyward some 73 pips in the first hour of NZ Trading. The buying stopped abruptly just below DCZ 1.2775 and like thieves in the night, the buyers disappeared just as quickly as they emerged.
PA has rejected the higher level and Asia selling has seen DP tested. This then, is the point at which our week begins. DP remains sandwiched between WP and MP, indicating mixed signals. An ascending Channel is staking claim as the Intraday Charts’ dominant feature (Flag #1), suggesting a Bearish continuation may not be too far off. Tempering that argument for the immediate future, is a less dominant Double Bottom #2 on H1/M30. That suggests to me that a sneaky Long to the top of the Channel might present an ideal opportunity to get back to Bearishness!
The Day Ahead
There might be something left in this rally so Plan A is buy towards the top of the Channel without taking my eyes off the Bears who I think are ready to pounce.
High impact News – CET
|11:00am||EUR||German ZEW Economic Sentiment|
Terrific Tuesday everyone.