G’day Surfers – heeeeelllppp! Is that he EURO drowning?
Despite a great fight and signs of courage under fire – the EURO has yielded to the 1.30 level. The final support level @ 1.3033 turned the EURO away yesterday, despite pleas from the currency to grant passage to the North. After a couple of tests of 1.3085, and then a brief visit above, the EURO did an about face late in US Session and has declined since. With the cross oversold, we weren’t looking to short the market but poor liquidity and multiple false break outs in both directions dictated that we keep our capital safe from harm, so a flat day.
Despite the break of 1.30, we haven’t seen a major crash during Asia Session, suggesting to me that the Technicals still have some influence in this Fundamentally driven market. Daily Pivot has snuck a little further away from Weekly, opening that gap to 134 pips. This oversold signal appears to be preventing the EURO crashing through Monday’s low of 1.2952. That other gap (between Friday’s close & Monday’s open) remains ajar, adding weight to the prospects of some pullback. So really little change in the big picture: Strong Bearish Trend – Oversold – Daily Pivot untested – Open Gap – Major Trendline untested from below.
The Day Ahead
So how do you treat a wild beast being driven by a crazy mob?………………With extreme caution!
We have a far more decent resistance trendline to play with today and nice support so we will ask price action to come play with us at one of two Hotspots. Again I am only looking for countertrend trades long, given the technicals above and the fact we trade technicals, not fundamentals. However, any entry will be at minimum stake in line with Surfing The Pips Strategy regarding trading against the trend. My play of the day is a direct break of the resistance line targeting Daily Resistance #1. I would NOT like entry to be directly below Daily Pivot however.
Happy Surfing everyone.
Geoff Pyne | Certified SurfingThePips.com Trader