G20 leaks provide added confusion to a difficult day... June 18th

Hi and welcome to our EUR/USD brief for today

Context
The Greeks have voted and we have general confidence a pro bail out Government will be formed. This is positive for the Euro and we have seen a small gap up and will expect the news to bring some buyers to the currency. Unfortunately the picture isn’t quite as clear as that for two reasons. Last week we saw the Euro rally as people squared away short positions, we may see them sell back into those positions during the week. The second reason is we have a swag of major news coming with the G20 meeting this week, a fed statement expected and the EU leaders fight, I mean summit, on the weekend.
The G20 provides particular difficulties today and tomorrow as while the meeting is closed and details are only released at the end of the day, it’s well-known that leaders talk to media during the day and that means unscheduled rumors bouncing the market around.
We are able to trade this market on our favored 30 minute chart with tight stops and quick initial targets to keep our stays in the markets short and hopefully sweat.  I won’t be looking to take any major longer term positions until direction settles. If you would like an opinion I expect to see the Euro lower yet, but I will take my time and find a good entry to trade that position, not rush in and risk spending time in a losing trade.

Technical Analysis
The daily pivot has re-crossed the weekly pivots and is now sitting between weekly and monthly.  We have seen a gap up on opening and the attempt to close the gap stalled by long term support. As I write this the daily bar is a perfect doji and the market is stalled.

I will watch the two long tale bars on the 4 Hourly chart for direction.  The opposite long tales offer me the extent of the current range and I will be prepared to come into the market only after a break of one of these levels.

I think a confirmed break of the support level will see the closing of the gap and a test of daily pivot.  A break to the top should hit resistance around 1.2815.

The entries are conservative and looking for retests as confirmation of direction as a reflection of the unpredictable nature of the market.

The Day Ahead –
Our trade warning on Friday suggested care in the market until midday today and I still recommend that.  We are under Red news all day with he G20 summit and nearly every trader I know went into the weekend flat. This morning many of them will be returning to the market. We may see some volume and volatility around Uk open and I would suggest staying out until the amateurs have played there game, and we can follow the professionals in. I will also want to see a break of the levels on the 4 hourly chart as confirmation of direction.


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Day ALL G20 Meetings

All the best
PLB