G’day Surfers – not surprisingly, EUR/USD has all but returned to its pre-Summit level. The market has this wonderful ability to be brutally frank and unsubstantiated rhetoric, seldom has a lasting effect on Price Action. I believe we are currently witnessing a correction, of this order.

Yesterday’s Report

Price Action supported the above sentiment by wiping 100 pips off the spike that resulted from last Friday’s Euro Summit announcement. While the USA partied, enough sellers were around to send Price Action approaching the 1.2500 level. That level held but will face further testing, as the week winds down and NFP looms large. As per our discipline, we avoided trading on a USA Bank Holiday.

Technical Analysis

The “Dance of the Pivots” continues as Daily has crossed both Weekly & Monthly, leaving us with a mixed scenario. This corroborates what our trendlines are telling us – no direction. Certainly, we appear to have a short term Bearish motion, post the bespoke spike. That movement has arrived at our Support Trendline so our attention is drawn to this Hotspot. The untested Daily Pivot may hinder the continuation of the movement South but I do feel that Economic data coming thick & fast this afternoon & tomorrow of course, will determine the market’s fate short term, rather than our technical observations.

The Day Ahead

I believe we will be in a holding pattern this morning as traders prepare to react to all the upcoming data releases, in particular the ECB release later today. There may well be some good opportunities this afternoon, between announcements. My sentiment is Bearish but I do believe short term direction is dependent on News. Prepared to trade in either direction, we have Hotspots at the ready and the potential for more as a result of Price Action. So don’t change channels whatever you do – it could be good viewing this afternoon!

Enjoy.

Geoff Pyne | Certified SurfingThePips.com Trader