Happy New Week Surfers – Cards are dealt, let’s play!
EUR/USD surged a further 132 pips despite some good economic data out of the States, to finish the week @ 1.3118. Whilst the weekly gain of 318 pips is by no means historic, it’s certainly a standout for Price Action of the past 18 months. Clearly, the short term effect of QE111, one would imagine, is in keeping with the Fed’s expectations. Sustainability?? It being Friday & amidst all the announcements – we stayed flat.
The good news (apart from the fact we don’t have to deal with game changing announcements) is that Daily & Weekly Pivots are, courtesy of the new week, in the same neighbourhood. The bad news is that Monthly is a substantial 600 pips below Daily. Again, whilst not unprecedented, this circumstance is Technically limiting in that it all but prevents us placing a Long order. Combined with the fact Price Action is currently 80 pips above Daily, going Long before pullback is a big NO-NO! So we’re keen to buck this trend and Short EUR/USD right? Whooooaa, not so fast – you REALLY think a reversal is imminent? Trying to pick the “Top” of this run is guesswork and NOT part of our trading strategy. We need to see a meaningful lower high and preferrably a lower low to match, before we attempt to trade the expected pullback. Price Action is currently above strong Support/Resistance @ 1.3115 and indeed 1.31 the figure, so it won’t be keen to yield beyond those levels. Technically very tough but a break below this pair, could be the trigger for the pullback.
The Day Ahead
The key number for me is 1.3115 and it’s around a break of this level that I expect any trading to take place. We have an intraday Support Trendline in this vicinity so this is my Hotspot of the day and provided I have the aforementioned criteria to consider a Short targeting Daily Pivot, a small stake trade may ensue.
High Impact News
Have a happy Monday & week
Geoff Pyne | Certified SurfingThePips.com Trader