Happy New Week Surfers – our last for 2012. A week that may see more positioning in anticipation of that good old Fiscal Cliff – OR – the annual wind down in anticipation of Christmas.
A very late move on Friday, broke the two day 80 pip range and took EUR/USD to a 3 month High of 1.3172. That capped off a quite Bullish week for the cross which gained just shy of 300 pips for the week. It being Friday, we were not trading.
The bespoke high is now formidable Resistance for Price Action and the potential for pullback here is strong. With an untested Daily Pivot due South and looming, it’s not unreasonable to suspect a test is imminent. Apart from the Resistance being offered by the September High (1.3171), I see nothing (fundamentals aside) impeding EURO’s progress to 1.3311. Certainly, we are 8 days out from the chubby, bearded & red suited one stumbling down our chimneys so liquidity may be low, making trading treacherous and we need to be mindful of that. Our Pivots can see only one direction (and it’s NOT Short) – the gap between Weekly & Monthly suggesting only a hint of over extension & I can absolutely see a re-test of 1.3115 (our much tested S/R level) but to trade this cross Short currently & without substantial pullback and a break of my Support Trendline, is a prospect I can’t consider.
The Day Ahead
Absolutely Bullish but in need of some pullback, I will look for a re-test of the DP/1.3115, Support Trendline (my Hotspot) and a Secret Surfing The Pips Candle Pattern signalling a Long entry. Price Action may create an Intraday Resistance Trendline that I could also use to gain entry). I would want to see a break to the South of those Support levels AND a re-test from below, before considering Shorting EUR/USD.
High Impact News
|3:30pm||EUR||ECB President Draghi Speaks|
As we enter our final week of trading for the year, as mentioned in today’s Daily Brief we are 8 days out from Christmas, a traditionally illiquid period which displays unreliable trading conditions. We need to exercise caution during this period and our rules dictate that we trade ANY setup at least 1/4 Stake. We want to enjoy our Christmas break rejoicing not only in the spirit of family and giving but in the fact we had yet another successful trading year. We don’t want to risk a bitter taste in our mouths trading full stakes in an unpredictable market. Rather, the succulent taste of Turkey, Ham and most importantly – Champagne.
Make yours a magic Monday.
Guess what? We made profit & nice pips yesterday. Yes, nice beginning of the month for our accounts. As you can see from the image attached (BEFORE/AFTER) our analysis was perfect at the pip once again. We also made a video about the trade we placed yesterday and the “Pre-ABC” concept. Check it out here.
Pivots are now in perfect bullish set-up, but, as you can see from the chart attached, Daily Pivot has not been tested for 2 days in a row, and we know very well that this is very uncommon and against probability. We are in a classical NLNS situation. No Long No Short. No Long because I need D-P to be tested before going long, otherwise I’m going against the odds. No Short because the sentiment (pivots) is still bullish. Price action is finding resistance on a level which was support last weeks (check chart). This level and the support level below are the crucial levels of the day.The Day Ahead
I will wait for a pull-back at D-P (without trading the movement from here to D-P). Once price will hit the level I will look for reason to buy. Check the Play of the Day. If I will see a bearish SurfingThePips.com Secret Pattern below the support trend line I will give a small hit to a short as well.
High Impact News (C.E.T.)