13th June EUR/USD Dailly Breif

Good morning/afternoon to you all.

Yesterday was another good day for us with the market behaving exactly as we expected and staying between our support and resistance levels.

Price poked its head out and tested both sides but no bars closed outside our zone. It was the range trader’s day yesterday and I hope they made the most of it. Trend traders have had a decent time recently. I didn’t trade the range, that’s someone else’s game.
Critically for us, as we also predicted we saw daily pivot slide below weekly.

Context
Terrible news comes pouring out of the Eurozone with the costs of borrowing for Spain and Italy rising, latest house prices in Spain down over 30% from the peak and confirmed to still be falling, and the ECB suggesting the housing market may have another 15% to  go. Cyprus rumored to be asking the Russians for money, and Fitch downgrading more banks…We should be crashing not just dropping but there is one issue, No polls are allowed before the Greek re-elections and best guess is we don’t know who will win. The big money wants to reduce risk before the election and the market is heavily short Euro… The big guys want to cash some of that up before the weekend, and that means buying some of their shorts back, but how and when?= MESSY

Technical Analysis
The daily pivot has crossed the weekly pivots and we now have our pivots in perfect bearish order, price is below and testing DP as I write this, a rejection short here and the technical bias is strongly short. The crossing of pivots is a good indicator of direction.

We have the triple bottom and trend line around 1.2450 as a support target, and the break of it opens the possibility of a more aggressive push down.
WE do need to watch for a short covering Rally between now and Friday afternoon. The market is very short Euro and will want to balance that a little before the Greek re-elections.

The Day Ahead –
Fundamentals are messy this week, trade carefully. Price might especially bounce around in the build up to the Greek re- election.
I am expecting a bounce short today off either the daily or weekly pivot with a first move down to support at 1.2450, a bounce and then price to take another run at the level and probably break it. There will be some big money banking profits on their shorts here so if the level goes it may go quickly. The option is to take half your position off and let the remainder run...

 It offers me two short options plus the option to sell the lower high below the support level.
I will be reluctant to go long today and would need price to break resistance at 1.2520 and then retest the level to give me the confidence. I think that’s unlikely today.

 News Today GMT
1:30pm USD  Core Retail Sales m/m 0.1% 0.1%
 1:30pm   USD  PPI m/m                -0.6% -0.2%
 1:30pm   USD  Retail Sales m/m         -0.1% 0.1%

All the best
PLB