Happy New Week Surfers, finally we have a bounce.
After a sustained effort from the Bears last week, price action had a really good look at this year’s low of 1.2614 before deciding that level’s just a little low for now. In their first real victory for two weeks, the Bulls used our major support level and no trade Friday to pull the market back a little, to a more respectable number, just below 1.28.
Friday’s move provided a perfect re-test of a major support trendline and it’s here that this week’s action begins. We’ve been spared the rare occurrence of a third gap being open, this morning’s closing quickly. However, two remain and we will be aware of this as we look for entries throughout the week. Celebrating the new week is the reacquaintance of Daily with Weekly Pivot. With their relationship stretched over the previous fortnight, perhaps it’s time they spent some time together and this is what I’m expecting – a period of consolidation. With the near re-test of this year’s low, we do have a big double bottom but the question remains “will European & global fundamentals allow technicals their turn?” If so, I would expect price action to target our next major level of Support/Resistance @ 1.2908 in the next couple of days. However, if the market hasn’t factored in enough fear & doubt over Greece et al, then they will bounce back off our trendline (curently being tested) and push once again towards 1.26.
The Day Ahead
Clearly we are still in a strong Bearish trend and despite the reunion of Daily & Weekly Pivots, they provide no argument for the Bulls. The double bottom and signs of a potential false breakout of our Bullish Trendline, combined with the open gaps give me a Bullish sentiment but I can definitely see a potential false breakout of the Intraday Resistance Trendline which would send price action Southward, to the untested Daily Pivot. It’s a little complex but I can see opportunites to trade in both directions, if the market will come to us. I will watch for a classic Surfing The Pips signal off the intraday trendline for a short entry on M30 and look for the same classic setup to enter long – probably on H4 Chart. It could be an interesting day!
Geoff Pyne | Certified SurfingThePips.com Trader
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