Big Winner last week, no rush today

Hi and welcome to our EUR/USD brief for today.

Those that followed the Blog on Thursday should have had a big win as we predicted the main turning point south. The poor Spanish bond auction results will have peaked our interest followed by the retest of our long term support line. The reversal bar is not ideal as its to long, but the doji bar type, strength of the new resistance area and Spanish news should have got us into the trade with a stop of about 30, and a target finally hit at 150 pips and a 5% winner. That’s a good month for most traders.

Context
The market has made some big moves recenty. Its hard to remember that just over a week ago it rallied 250 pips with the carnage that then followed Thursday and Friday. We have a shortage of red news this week especially on the Euro and a bullish looking USD. I expect the week will end lower than it starts but today may see a rest day.

Technical Analysis
We now have the pivots lined up in order with Daily Pivot, below weekly pivot, which is below Monthly pivot. However the Daily and weekly pivot are well over extended from the monthly pivot and I expect some form of retracement before we continue the move down.
Even our 4 Hourly chart which appears more bearish than Lewis Hamilton’s championship aspirations, has hit a trend line and appears to be setting up for a phase 2 rally of some kind.

The Day Ahead –
I think the key to today, and probably this week is to wait and pick the right bounce short. I expect either a sharp movement in the first hour of the Uk session, or a few false break outs and a patient approach required.

Bias- My overall bias is still short, but I am expecting o see a few rallies this week and most likely a test of DP today.
Short entry: A break of my trendline, with a retest and a nice chart pattern would see me in short. Or a break, or test of the pivot, a move down and a lower high.

Long Entry – While i am expecting a retracement, there is no long option for me above daily Pivot today today with resistance above at Daily pivot, Weekly pivot, Previous support now resistance and then trend line. Each is about 40 pips from the other and there just isn’t enough space here to interest me counter trend.
I would consider a long below daily pivot, if we get a sell, followed by a move up, and a pull-
back to a higher low, then i would look to trade up to DP.

 RED News Today GMT
1:30pm EUR ECB President Draghi Speaks

All the best
PBT