G’day Surfers, waiting…..waiting…..waiting, for the sound of the Euro hitting bottom. Problem is – it may be a while coming!
As it’s been for way longer than my liking, EUR/USD continued to fall without adequate pullback, making yesterday another flat day for Surfing The Pips. Put smply, world financial markets are now scurrying for cover, abandoning any commodity, stock or currency classified as RISKY. Sadly for the Euro, it ticks more than a few of the risk boxes.
Fundamentals concerning Europe in general but of immediate concern Greece, are spooking the markets which are showing scant regard for technical support levels. Only two of the last seven trading days have seen modest pullbacks with yesterday’s shedding of 150 pips, not being one of them. It was all downhill yesterday after a promising start to the day saw a test of Daily Pivot, giving us a potential buy at intraday resistance.
Bad Economic Sentiment (surprise surprise) numbers out of Germany was enough to halt any further bullish action and the bearish trend gained more momentum later in the day as the U.S. produced some good manufacturing & investment numbers.
The only thing changing technically in the past weeks is the next support level!! Well Euro is fast running out as it approaches the 2012 low of 1.2620. It would be a brave analyst indeed, who suggested this cross won’t see that level before week’s, if not day’s end. It’s still true that we have two open gaps, a massive gap between all three pivots and an incredibly oversold situation but it’s getting VERY difficult to make a case for entering long into this market.
The Day Ahead
Anyone for Golf?? In short – this market is not one that Surfing the Pips can trade. As technical analysts, we use trendlines based on history, both long & short term. Whilst it’s true the market has seen crashes come & go, the fundamentals driving the market currently are ground breaking. I haven’t spoken to anyone who can remember the last time the FX Market had two open gaps; for the first time a country may pull out of the Euro because it’s people won’t back a government who backs austerity as a means of stemming it’s crippling debt levels etc., etc.; should that country crawl back into it’s shell, what then of others in similar circumstances? These are the things driving the markets – in a word…….FEAR.
Do we pack up and go fishing – no, not at all. We will ALWAYS learn something from what the market gives us on a daily basis. Whilst that may not be our next entry, it could well be something we can use next time the same circumstances appear. Our analysis is done as always and if they come to us, as always, we’ll be there!
The market will always be there – & so will Surfing The Pips.
Have a good one.
Geoff Pyne | Certified SurfingThePips.com Trader
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