Happy New Week Surfers – “mercy sakes alive – looks like we got us a Gapvoy”……….with apologies to CW McCall.
Friday panned out pretty much like Thursday – the market trading in a box range of a mere 50 pips. Anyone trying to trade that would be very bored and potentially lighter in their bank a/c. A very nice double bottom was created right on our major support level of 1.2908. The market bounced off there but only as far as Daily Pivot before closing the week in consolidation around 1.2920. Certainly the week confirmed that the market was happy to settle under the psychological number of 1.30.
The very first thing that comes to my attention when I look at the new week’s charts is that, as expected, weekly Pivot has joined the pilgrimage South of the border, to rest just 28 pips above Daily Pivot, hence closing the 200 odd pip gap that developed last week. This has significance for us because it allows us to think about shorts, now that critical gap has been reduced significantly. However, the weekend has produced yet another gap in the market – adding to the yet to close gap from last Monday.
As always, whilst these gaps remain open, trading in the opposite direction is risky. The higher lows we were getting on smaller time frames on Wednesday have been violated by a new low of 1.2877. Daily Pivot is untested today adding to the slightly stronger magnetic pull Northward so currently, we have mixed signals.
The Day Ahead
Decent trendlines are again very difficult to find so our patience exercises may well be extended. As the market stands, we cannot go long until we see confirmation of a reversal by way of a higher low. To take a short entry would be risky until at least daily Pivot is tested. Let’s see what price action gives us and go from there. My Hotspot is a convergence of three support/resistance lines so could prove interesting!
Have a great day.
Geoff Pyne | Certified SurfingThePips.com Trader
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