Waiting For Captain Bernanke of the USS Borrowed enough

Hi and welcome to our EUR/USD brief

I would especially like to welcome new viewers, our readership was up 50% yesterday, and I thank whoever is providing referencing us to others. I am sorry to start with a longer then usual blog but its an interesting day….

Monday was a day where our numbers were accurate and some good opportunities arose, but it took patience to get our winner. We started with a break below DP that was too fats for us to get an entry, the move went to our target of 1.2180 and promptly reversed. This happens in trading and you just have to accept it and self-manage your reactions. Price then rallied and broke Daily pivot and came down to retest, it’s been a classic entry for us in the last few weeks but this time was in our NO Trade area. The strength of the buying is something we have discussed and may have got some of you in. Prce then broke weekly pivot and retraced but didn’t give us the retest we would like, the higher low would still have been a tempting and profitable target for some.

Finally we saw out 1.2270 level broken and a retest (down to 1.2265) and our preferred entry offered.  The bar was small an entry at the top with stop loss of 10 (longer than the bar, but to give some breathing space) saw about a 4% profit. Well worth the wait.

Context
Captain Bernanke of the USS Borrowed Enough is speaking this afternoon and the market is likely to wait to see what the fed chairman says.  I expect him to mention QE 3 without committing to it as he tries to keep everyone happy. The market however will bounce around on such a statement.
The retracement continues and it will be interesting to see how long for..
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.
The Daily Pivot has tucked in close under the weekly pivot, both are well over extended form boig sister monthly.  So the pivots are lined up in bearish order. The closeness of Daily and weekly pivot is likely to pull price in and a test of pivots is likely today.
The thing stands out on the 30 minute chart to me is the higher lows and higher highs (I had heard the Euro could do this but wasn’t sure it was true).  1.2260 is the key here; a move below would give us a lower low and a push down at leas t to DP, where another higher low would be pretty bullish.
The 4H chart shows  the tripple bottom and a higher high so is Bullish for now.

The Day Ahead –
I won’t trade between daily and weekly pivot. This area belongs to the market and will be to choppy for me.  I will wait until it commits to a direction. Then I will jump in and see what I can do
Bias- My overall bias is still short, I am however happy to look at longs above Daily pivot, and especially while we have higher LOWS>
It’s possible we will see a continuation of this retracement and hard to predict when we might go short again, but easy to predict it will.
NO TRADE: We are okay to trade anywhere to day
Short entry: A break of 1.2260 would open the way for a short down to DP, we would want to see our normal pull back and lower high to enter. A break of DP would see a similar set up targeting 1.2180. A break of 1.2160 is unlikely to see a retest and would allow for a higher risk, aggressive entry on the break.

Long Entry: Any higher low from here would see an immediate entry targeting 1.2320. If we get a test of pivots, a bounce and then pull back would be our favored long of the day.


RED News Today GMT
10:00am EUR German ZEW Economic Sentiment -17.3 16.9
1:30pm  USD Core CPI m/m 0.2% 0.2%
3:00pm  USD  Fed Chairman Bernanke Testifies

 All the best
PBT