7th June EUR/USD

Good morning/afternoon to you all.

Context
 After a very choppy day yesterday the market appears to be waiting for Fed Chairman Bernanke’s testimony today. Rumors suggest that he will signal some form of further easing in the US but I suspect this is an overreaction in the market to the poor NFP figures. Central bankers are far more interested in trends than one of numbers, and with NFP released on the first of the month limiting correlation time, I would suggest the NFP numbers are open to being revised up during the month.
The real wild card today is the Spanish bond auctions on 10 year debt. If that figure comes out high or the bid to cover ratio falls sharpily… the Euro fears will be back, and we will be heading down. I would suggest that with all the attention Captain Bernanke will get, these figures may rule our day.
Notice how since the NFP numbers we have had a clear direction. Captain (I know he’s a chairman, but I like calling him captain) Bernanke’s testimony is similar; it could send the market in a direction for some days, the Spanish Bond Auction figures are more likely to see a quicker more emotional response.

Yesterday's Report
Yesterday was choppy and messy as the market tried to decide on direction amongst conflicting news, and anticipation on Captain Bernanke’s thoughts.

Technical Analysis
The first thing to note is we are in an up-leg, with confirmed higher highs, and higher lows. This is confirmed by the fact the Daily pivot is above the weekly pivot. The existence of both the Weekly and Daily Pivots below the monthly Pivot puts the move in context for us. This is still an up leg in an overall down move.
Price sits almost in the middle between our support and our resistance level, as well as between Weekly and Monthly pivots.

 This is not places price is used to being; it is normally drawn towards or repelled away from such levels. Its position here suggests indecision and range.

The Day Ahead – A DANGEROUS DAY TO TRADE
I expect price to range until Chairman Bernanke speaks (Unless Spanish bond figures come out) , the most likely move for me is, having just put in a higher high, price will come down and test Daily pivot and our trend-line, putting in a higher low.
There will be no long entries for me while the timing of the Spanish announcement is tentative, bad news here could make slippage an issue on exit.
Even a short entry would take my favored S price pattern, price would need to come down and break daily pivot, retest it from below and then take out the previous low before I could consider it. This would need to happen well before we hear from the captain.



News Today GMT
Tentative         EUR   Spanish 10-y Bond Auction         5.74|2.4
1:30pm USD         Unemployment Claims         381K 383K
3:00pm         USD          Fed Chairman Bernanke Testifies

All the best
PLB