We had a mixed day of trading yesterday with News dominating as expected. The good news is that prior to the FMC Statement, we found a way in to the only Bullish movement of the day and hit target after a bumpy ride. Then the fireworks began and EUR/USD dropped 140 pips like a rock, taking the second part of our S&R trade with it. Both profitable trades so no problem there. We did have a casualty though, in our second S&R order, this one on GBP/JPY. Somewhat surprisingly, this cross reacted to the Fed news as well, taking our stops with the fall.
So the Flag has delivered its promise and sent EUR/USD reeling below our 1.2645 DCZ and looking keen to visit the next DCZ, 1.2510 which, not coincidentally, is this Month’s Low. It seems the Fed has said nothing to dampen the enthusiasm for USD and the return of the Pivots to Bearish formation adds up to an over all Short bias. The ONLY potentially positive sign for EUR/USD is an untested DP well to the North. You would expect some Bears might cash in on yesterday’s spoils, thereby at least consolidating the cross but for me to trade, I need to see pullback to at least the DCZ but DP would be better.
The Day Ahead
A NLNS (No Long No Short) day for me I believe but if the market pulls vack some – you just never know.
|All Day||EUR||German Prelim CPI m/m|
|1:30pm||USD||Advance GDP q/q|
|2:00pm||USD||Fed Chair Yellen Speaks|
Have a great day