G’day Surfers – the trade we sought, I cannot claim.
If you were looking for a lively start to a session – you got it in spades yesterday as the EURO Shuttle literally launched itself and for the first time in recent weeks, held it’s ground. We were given the signal to enter with a Secret Surfing The Pips A setup and duly sent the signal out. Such was the ferocity and swiftness of the bullish move (something like 50 pips in 30secs), our subscribers were left floundering for their MT4’s and the trade was gone. The move was sustained into NY Session where it settled into consolidation around 1.2145.
I see no classic pattern to suggest EURO has indeed bottomed – one rally, does not a trend make. I do see it sitting under our strong S/R level of 1.2174, having made an approach during the frenzy yesterday. I also see a nice convergence with that level and a resistance trendline that I believe is the key level of this Thursday. Price Action has compressed into a classic pennant formation and the market will see this as a continuation signal so a break to the upside is on the table. Should that be the case, the bespoke convergence could be the point at which the market breaks its first significant level of resistance since Feb/Mar. It could also be the point at which this rally ends! The market gap is no more and our Pivot gap has been reduced but still lays measures 82 pips. A re-test of 1.2174 may be enough to satisfy the loneliness of our Pivots and put shorts back on OUR table. Pivots are of course still very Bearish.
The Day Ahead
My sentiment is still with the Bulls and I’d be happy to trade counter trend up to 1.2174. Without Price Action retreating a little to give me a decent risk/reward to there however, entry will be difficult (not impossible). I therefore favour a false break of the support side of the pennant, then a run at our target. I will then look for our longer term resistance trendline to provide me with further sustenance. As I write this, Price Action is breaking the resistance side of the pennant – only time will tell if for real, or not.
|4:00pm||USD||Pending Home Sales m/m|
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Have a good one
Geoff Pyne | Certified SurfingThePips.com Trader
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