Spanish Bond rates the possible secret key to the Euro, address to get release figures...

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

Yesterday was another good day for us with the Euro, ignoring the popular belief it should rally and instead acting exactly as we predicted.  The lower high that we asked for was formed with  a perfect entry bar, entry below, stop loss above the bar and target the Daily pivot. There is a very easy 2% for those that follow our blog…

After the market paid us it dropped down to monthly pivot and has spent the remaining time between Monthly and Daily pivot.

Context
The Eurozone deal looks anything but confirmed with a couple of countries voicing opposition to it (they must have been playing golf while it was being agreed), and the German Parliament still having a final veto on bailout funds. The market is left with uncertainty and is back waiting. The Bulls and the Bears never really fought it out yesterday and they still appear to be sizing each other up before the big fight. This week sees a US public Holiday Wednesday and then NFP Friday so the hesitation here could easily see the liquidity dry up, and the fight put on hold until NFP provides one side an advantage on Friday afternoon.

In my humble opinion the secret key to trading the Euro is Spanish Bond rates, if rates hold the Euro should hold, but if they start and push up I expect the Euro will quickly start and look down. (Normal Disclaimers apply). A source for Spanish Bond auction results http://www.tesoro.es/en/index.asp

Technical Analysis
Even the technical picture is mixed. We have our pivots in perfect Bullish mode, and looking set for a move up.  But on the 4H chart the recent rally looks a lot like a phase 2 retracement, with our last major high and low, being lower it looks distinctly Bearish. Key levels remain 1.2677 long and 1.2520.

Todays a day for those that can trade price action, and candle patterns. The rest possibly will need to wait this out. One of the big lessons for trend traders is NOT to trade ranges.. We should have made enough money recently that we aren’t drawn into this mess.

The Day Ahead –
Bias- My bias is slightly short, its just an instinct. I will avoid the range between Monthly and Daily pivot, it could be pretty choppy in there. The quality longs here are above 1.2677 and the shorts below 1.2520.
Short entry: The first lower high below monthly pivot.
Long Entry – The first lower high above Daily pivot, will provide a possible entry long.

NO RED News Today GMT

All the best
PBT