G’day Surfers, all aboard the elevator……….
EUR/USD is trapped in an elevator but doesn’t know which floor to stay on! Fridays 200 pip crash was answered in swift fashion yesterday with a 150 pip rally that produced false breakouts of both our strong support @ 1.3033 and the yesterday’s support trendline. We were expecting a pullback to our Daily/Weekly pivot area but got far more than expected. Yesterday’s beta resistance trendline was confirmed, as was our Hotspot and between them, they delivered the support necessary for the elevator to head towards the Penthouse – and it did. But the bullish movement started to go wild during late US session, a part of the day we don’t like to trade with Intraday Strategy. Too risky.
The first and very important image I see today is the crossing of Daily & Weekly Pivots. This puts the pivots in perfect Bearish formation but I confess to being a little wary of that signal just yet. I can also see a descending triangle forming on M30 Chart which would support the Bearish mood but equally, I see a very narrow, but distinct continuation Flag Pattern on the same chart. So I have questions of the market today, the main being …. Is the false break of the support trendline to be confirmed?
The Day Ahead
I expect the answer to come from a revisit to that trendline, producing either a bounce or a break. It is a Hotspot for sure today. If price action is kind to us, we also have an intraday support line that began off yesterday’s Low which has just a hint of Head (as in Head & Shoulder) about it?? A setup short at this line would enable us to anticipate the test/break of the major support trendline. I’m happy that we have some lines to play with today and am prepared for just about anything that the market wants to give me at any of my three Hotspots. My play of the day is a combo. I’m looking for a quick short off intraday support trendline hoping for a TP1 before major support trendline test/break. If it’s to be a break – happy days. If it’s to be a bounce, I’ll be waiting for an StP setup to take me to the Penthouse.
Have a great day.
Geoff Pyne | Certified SurfingThePips.com Trader