G’day Surfers – it’s all about the flags.
Our observation that EUR/USD had travelled far enough prior to London Session yesterday was spot on – Price Action increasing the Daily Range by a mere 17 pips, before closing up 40 pips @ 1.3058. We spotted two opportunities to trade (one in each direction as it turned out) in the choppy conditions, only to see Price Action reject our invitations, as if we’d been sprayed with Pip Repellent. Once again, our strategy protected us from entry and potential loss in what proved to be a very poor trading market.
My chart looks like the Olympic Arena, inundated with Flags. Problem with that is, one is a Bullish continuation pattern – the other – Bearish! So actually having a bias today is not a simple task. As always, I look to my Pivots which are as clear as crystal – their pointy bits still directing me to 1.3115 and beyond. Price Action has broken the Support of the Bearish Flag and is currently deciding whether Daily Pivot is going to yield or reject it’s approaches. Price Action has been oscillating around Daily Pivot since our week commenced yesterday and if it successfully breaks that level, our Pivots are wrong. A bounce here would obviously prove them correct. Price Action has entered a congestion area and we have both Support & resistance Hotspots ready to catch the break.
The Day Ahead
I do believe price action will give us a clear indication which direction it’s headed rather early on today. The current battle at the bottom of the Bearish Flag should prove decisive. Sentiment is still Bullish but the battle of the flags will settle it for me.
High Impact News
It all happens tomorrow
Have a Terrific Tuesday everyone.
Davide Franceschini | Chief Trader and Founder at SurfingThePips.com