The market has done exactly what we asked of it but it has taken 24hrs to do so. We asked price action to test our daily Pivot and come back to play with us at our resistance trendline. Somewhat obligingly, it has returned to the exact place it was at the beginning of London Session yesterday – testing that very trendline. Price action fell 60pips before finding support at 1.3205 (Daily Support #1) and has since clawed its way back to our Hotspot.
Whilst the scenario seems precisely as it was this time yesterday, I note one significant difference…………..Daily Pivot has been tested and rejected, leaving the path to the North open and inviting. As expected, Monthly Pivot took a dive, crossing Daily Pivot but only succeeding in joining Weekly. Though not 100% by the book – I’m happy to say the Bullish Trend is confirmed. I do however, feel the close proximity of the pivots suggests the trend, whilst significant, isn’t overwhelming. This is no surprise given what i determine to be a lack of volume in the market. I am seeing pennants on most time frames suggesting uncertainty as to a direction of any potential breakout. As per yesterday however, I will not be shorting this cross until the higher low sequence is broken.
The Day Ahead
Looking for longs is the name of the game again today and I see two opportunities, close to price action. I’ll be looking for Surfing The Pips setups on our very reliable resistance trendline or off a support trendline that whilst a little acute, is quite interesting and may be the only chance of catching a movement long. I would prefer a direct break of the resistance trendline as an ABC trade will take entry a little close to major resistance.
Geoff Pyne | Certified SurfingThePips.com Trader