G’day Surfers – I can’t quite tell if they’re Sockeye or not but it appears the Salmon are at it AGAIN. Still trying hard to climb that waterfall but the Bears keep picking them off.
Another day – another wound inflicted on the ailing EURO. Because of the oversold (understatement) nature of this cross, Surfing The Pips Strategy dictates we cannot sell into the market so our discipline had us in Capital Protection mode. Surfing The Pips subscribers were treated to an invaluable insight by Chief Trader & Strategist Davide, who presented a compelling explanation of the necessity for the market to provide confirmation prior to entry. Looking for longs, as we were, we recognised the need for Price Action to confirm it’s intention to rally, prior to us entering into a long trade. The market demonstrated this valuable lesson to perfection by producing a false break of Daily Pivot and heading immediately in the opposite direction. We saw an opportunity on Swing & Relax dependant on a confirmation that didn’t manifest so we had a flat day.
I touched yesterday on the fact that EUR/USD was at Global Financial Crisis levels. Currently, Euro sits 140pips above the lowest level of the first wave of the GFC in 2008! Maybe we’ll find out in the next few days, if Traders/Investors of the World consider EURO is in bigger trouble now, than then! That level, of 1.2321 looms large as the next meaningful level of support for this cross and throws Intraday Technical Analysis into turmoil. Why? Because technically the Cross is waaayyy below it’s “level of balance” and MUST pullback. However, because that means little to frenzied sellers of the currency, technical traders must wait for equlibrium to return OR, join the gambling fraternity! So technically, we are in the same stream as the Sockeye – can’t climb the waterfall because there waits the Bears, can’t go with the flow because the primeval forces that drive us are leading us upstream.
Translation: Daily Pivot – Weekly = 100 pips, Weekly – Monthly = 600 pips, 2 open gaps above the market = OVERSOLD = NO SHORTS…….No higher lows = NO LONGS
The Day Ahead
Because we would rather protect our capital than gamble whether or not the EURO will turn and rally, we must contiue to wait until there are a) signs of that occurring & b) confirmation once it does OR, the market pulls back sufficiently (lots) to restore some equilibrium, thus enabling us to trade technically. To think either of those events will take place early, if at all today is probably optimistic at best. If they do, will I be there waiting? You bet your sweet sockeye I will!
Have a happy day.
Geoff Pyne | Certified SurfingThePips.com Trader
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