Hi and welcome to our EUR/USD brief for today.
Yesterday was a US public holiday and the market did its normal holiday thing of ranging, then chopping and then ranging some more. A good day to have away as technical traders.
Context
Unfortunately today is all about the fundamentals with a number of big announcements due. Both the ECB and BOE are expected to announce rate cuts, and for me most importantly Spanish 10 year bond yields should be in today. With the rate cuts both are largely priced in and the market is likely to sit and wait for the announcement. If rates are cut as expected then the attention will turn to the accompanying statements and hints in there as to future interest rate moves. These can cause a quick move but at least we know when to expect them. The Spanish Bond results aren’t scheduled so could hit the market at any time. When this is done the market will settle again and wait for NFP tomorrow. As such our trading needs to have tight stops and a quick TP1 to get risk out of the market quickly today.
The real key to trading today is to have traded with discipline all week. If we have we have banked a nice winner, and given nothing back and we will have no compulsion to get in the market today. If we have missed our trade or given money back its easy to over play your hand here and turn this into a bad week.
Technical Analysis
Even the technical picture is now mixed. We have our daily pivot below monthly pivot and our weekly pivot them both. It’s a bit messy really…. The 4H chart is fairly bearish but even it appears a bit undecided.
Really this is a mess and we should be thankful for the money we made earlier in the week and watch form the sidelines today and tomorrow.
The Day Ahead –
Bias- My bias is slightly short, although I expect a test of DP at some stage today. The area between support 1.2520 and DP is our no trading zone today and I think we may stay in it until news arrives..
Short entry: If 1.2520 is broken and retested from below, or we get a lower high I could be interested, but probably at reduced risk, and a layered target so I get some money banked quickly.
Long Entry – There is no long option for me today with resistance above at Daily pivot, Monthly pivot, trend line and Weekly pivot. There just isn’t enough space here to interest me.
RED News Today GMT
Tentative EUR Spanish 10-y Bond Auction 6.04|3.3
12:45pm EUR Minimum Bid Rate 0.75% 1.00%
1:15pm USD ADP Non-Farm Employment Change 103K 133K
1:30pm EUR ECB Press Conference
1:30pm USD Unemployment Claims 385K 386K
3:00pm USD ISM Non-Manufacturing PMI 53.1 53.7
All the best
PBT
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