Happy New Week Surfers: CYPRUS CRISIS – GOOD BANK/BAD BANK
Wind back the clock one week and we were faced with a massive 150 pip gap due to a completely untenable Cyprus Bank Rescue Package. Today, a new package, all but closed gap and EUR/USD back to pre-Cyprus crisis level. It’s like it never happened BUT I would suggest that’s NOT a prudent mindset. Friday saw the cross rally to the week’s high of 1.3008 before late selling saw the week end at 1.2958 – it being Friday – we didn’t trade.
The inverted Head & Shoulders #1 we noticed forming on Intraday Charts last week is looking likely as the dominant technical feature as we enter the new week. Ever popular Daily Critical Zone 1.3030 is once again the key level of the day however, as it has been for the past month. Pivots are now mixed as Daily has just crossed North to place itself between Weekly & Monthly. With Daily & Weekly in close quarters, I would expect Price Action NOT to be keen to stray further from this pair than is already the case @ 80 odd pips. I therefore have a Short Term Bearish sentiment which contrasts with my Bullish Medium Term outlook.
The Day Ahead
Still quite conscious of the Cyprus cauldron, I will trade with small stakes until the dust settles. I will look to trade a pullback towards Daily Pivot, should a setup present at my Resistance Hotspot but am also keen to find a way for the Inverted Head & Shoulders to make me some pips. The 100 pips of movement already today, has me favouring the pullback however. Looks like that’s well underway as I publish this.
High Impact News
|6:15pm||USD||Fed Chairman Bernanke Speaks|
Make Monday Matter and have a great week.