Happy New Week Surfers – it’s been great without it but it seems the BIG F is back – the FEAR Factor!
EUR/USD was cruising on Friday, having rallied a further 100 pips to the week’s high of 1.3102, repeating Thursday’s bounce off the week’s Low of 1.2910. Late U.S. selling was perhaps the precursor to what was to come. It being Friday, we were not trading.
Though Technicals had nothing to do with it, we find EUR/USD opening a massive 200 pips below Friday’s High, a combined Daily & Weekly Pivot untested (of course), 125 pips above Price Action and a substantial gap in the market. Under different circumstances, counter trend Bullish signals short term. For our strategy however, this one’s VERY clear – IMPOSSIBLE to trade right now! No way can we ignore the distance between Daily/Weekly Pivot & Price so therefore NO SHORTS but how can you guess that the trading world won’t simply SELL, SELL, SELL more Euro’s when London opens, in reaction to the Cyprus Bailout fiasco? = NO LONGS. So we must wait until the market settles a little and we get some technical confirmation that the selling has ceased. If it doesn’t quickly EURO could be in terrible shape, this time next week.
The Day Ahead
The market should make very interesting viewing today as it comes to terms with the Cyprus situation. Viewing is the key word form me – I MUST see confirmation that the selling has ceased prior to entry….as tempting as it might be to take advantage of the technical setup that is short term Bullish. To nominate a Play of the Day, I need Trendlines but again, I must wait for Price Action to provide one closer, than the distant one on my chart.
High Impact News
Make the Most of Mystery Monday