Whilst we were enjoying NTF (No trade Friday) EUR/USD took a 65 pip dip[ before recovering 110 pips to finish the week just shy of our major resistance at 1.3285.
This level has been in our sights for what seems the longest time (in fact the entire month of April). Gains have been very modest on a daily basis, the market lacking momentum and liquidity. So much so that I hesitate to call the trend bullish, despite the fact we had new highs at the end of all weeks in April, bar one. Without a major crash today our pivots will reform tomorrow, into a pattern that will confirm the Bulls are in charge however ( Daily above Weekly above Monthly). So can I see a major crash? Price is as stated, likely to test the strong resistance of 1.3285 pretty close to where that level coincides with a major resistance trendline so I anticipate price will stuggle to go higher than this level but such is the momentum (as slow as it has been) to the North, I feel it’s unlikely that we’ll see a dramatic pullback.
The Day Ahead
With cashflow & inflation figures out this morning, the market may be a little edgey but if it’s a typical Monday, we won’t see big moves in wither direction. Having said that, we should see the major resistance level tested and if the figures are decent, maybe a break of 1.3285. After Friday’s rally however, we may endure some more consolidation. With Daily Pivot yet to be tested I will be loathe to enter long and it’s impossible to go short into the momentum the bulls have created. Maybe a pullback to Daily Pivot, then a long off an intraday trendline.
Geoff Pyne | Certified SurfingThePips.com Trader