You always feel as if the Euro is only one bad news release away from falling again

Hi and welcome to our blog, and our EUR/USD brief

Its another wait and see Monday as we ponder last week’s first real Euro Rally, where we saw sharp buying and a resistance level broken for the first time in a while. The buying was sparked by ECB comments that they would do what was necessary to save the Euro, the market will watch closely this week for signs out of Germany that it will pay those bills.
As day traders we need to watch early in the week for signs of direction.

 Context
The Euro has bounced off little more than a few words by ECB officials, yet unemployment, social unrest, and lack of growth still seem to be bearish factors. To steal a quote you always feel as if the Euro is only one bad news release away from falling again. The market will watch closely this week to see if there is any signs of follow up to the ECB comments, and especially to see iF Germany seems ready to help fund such measures.

The market often ranges in NFP week, but with the Fed and ECB having announcements this week it may well chop around on the news first.

Technical Analysis
The weekly pivot has moved up for the first time in 5 weeks, and the daily pivot has crossed into Bullish territory. This despite both being well below the MP still.
The 4H chart is currently has higher highs and higher lows and for now we need to accept the market momentum is up.

The Day Ahead –
WE need to watch the market early in the session for signs of direction… technically we are long here, but we still need plenty of care.
Bias- My overall bias is still short, I am sure traders are lining up to sell the peak….
NO TRADE: I wont trade between Daily and weekly pivot
Short entry: DP is above weekly pivot, so any short trade would be at ½ risk. I would need to see a break of weekly pivot and then a pullback to it, or below it.
Long Entry: With DP above WP, we are able to trade long at full risk once we have had a test of DP (half risk until then). We are looking for the tets of DP, and a Higher high, followed by an entry on a higher low. I would be out at 1.2330 and only able to reenter after 1.2300.

 RED News Today GMT
 8:00am       EUR     Spanish Flash GDP q/q -        0.4% -0.3%
Tentative     EUR     Italian 10-y Bond Auction   5.82|1.7
All the best
PBT