Just as we thought it might have to be; bad news out of the USA provided some upside for EURO on Friday, with some less than ideal job numbers for the Americans. Whilst the Champers will need to remain on ice for now, we did see a 170 pip spike, with the market now consolidating 100 pips above Friday’s low. As always, we took Friday off and allowed those who trade news, free reign.
Further signs that the push to the cellar has abated can be seen in today’s test & rejection of levels below Daily Pivot. Way too early for me to be calling reversal of this fundamental fallout following fiscal failure plaguing Europe however, but a Thursday doji day, followed by a Bullish Friday has at least slowed the crash. Closer scrutiny provides clear Bearish contunuation signs as evidenced by our pivots pointing due South. Price Action appears suspended mid-stream sitting below a major previous Support level @ 1.2456, yet above our long term Bullish Trendline. Quite significantly for mine, the Market tested, but refused to yield below the 2008 low of GFC wave 1 @ 1.2326. That level remains the technical focus today and probably this week, as the Market deals with Friday’s news and this week’s ECB press conference, among other pertinent announcements. In short, nothing yet to confirm a significant bounce and still some targets to the South.
The Day Ahead
I expect consolidation for the most part, given the flag waving and ceremony surrounding Her Majesty’s Diamond Jubilee, under poor liquidity. NY session may provide some opportunities and we’ll be monitoring that of course. Price Action sits interestingly just below our adjusted (after Friday’s new highs) resitance trendline and that is the only available hotspot. I am still looking for a higher low on at least an H4 chart before entertaining a long position, so playing a false breakout of the trendline short, is Plan A. Now that Monthly Pivot is at least in the same hemisphere as Weekly & Daily and we are seeing pullback, shorts are back on the table. As our Publicist so eloquently prompted me yesterday – as the Anthem rings across the Thames for the next 2 days, maybe just maybe, there’ll be a verse “God Save Our EURO”.
Maybe that can produce a rally.
Geoff Pyne | Certified SurfingThePips.com Trader
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