Lower high has me nervous on this move and i will need to see a bounce off strong support to get long under 1.2320

Hi and welcome to our EUR/USD brief

Yesterday was a frustrating day for us. We got a quick entry into our initial long with a nice low test bar as a price action confirmation, but the market stopped 5 short of our target. I do hope people took profit at some point in the retracement or at least got out at break even.  Never let a decent winner become a loser. After this Captain Bernanke spoke and the market bounced around a fair bit…

Context
Captain Bernanke of the USS wont Commit is speaking again this afternoon and the market is likely to wait to see what the fed chairman says.  I don’t expect the market to react as volatilely as it did yesterday.
The market is had a little bit of a retracement and it will be interesting to see if we get some profit taking today and a continuation up, and if so when the market turns short.

Technical Analysis
WE now have a triple bottom at around 1.2170 and as mentioned this has created a decent bounce. Its now a crucial level on any trip down. We also seem to have a little resistance band building around 1.2310.
The Daily Pivot has crossed the weekly pivot and crossing of pivots is always important. WE have a confirmation here that momentum is up. Daily pivot has risen for the third consecutive day, on the proceeding days price has broken pivot and then bounced back above. I am expecting at least a test of DP today.
The lower high on the 30 minute and 4H charts gives me some concern about this move. I will need a bounce of strong level if I am going to go long below 1.2320.


The Day Ahead –
Overall I am concerned about direction and need the market to give me some confirmation before I can enter.
Bias- My overall bias is still short, I am enjoying this retracement long as it will provide better and better shorting opportunities in the future.
NO TRADE: Its not a chart area as much as I want to be convinced of direction…
SHORT ENTRY: My favorite trade here would see a rally to a lower high, and then an entry down to DP. I would be happy to see a break of DP or Weekly pivot, but would want to see the level retested before I could enter.. I just feel cautious today.. don’t have exact words for it.. but It’s the fact DP has been broken, and then smashed through the other way last two days… but I need some confirmation  to get short, retest of a strong level is one.

Long Entry: Two long options today. The first is a bounce of DP, and then a pull back to a higher low. I would trade that to 1.2295 target.  The second is a break of 1.2315, I would be happy to trade the first lower high (above the level) long after that. Be aware this is quite over extended so is more likely where a move will end, and only a violent move is likely to push through here today...

RED News Today GMT
1:30pm  USD   Building Permits  0.77M  0.78M
3:00pm  USD   Fed Chairman Bernanke Testifies

 All the best
PBT