The recent stats say break, retest and lower... lets see

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

Yesterday saw Euro price chop around waiting for Captain Bernanke to hint at everything and say nothing again… the man should be a politician. His words send the over brought market smashing down. WE got pretty close to a couple of our entries yesterday, but the bars on the long were to long, and we entries on the short were above the pivot and the confluence area. The short of the trendline would have been very profitable thanks to the news, but if you go short just above daily pivot 100 times, you will find its not a great plan generally.

Context
The Euro is waiting… News day 1 is over and we now wait day 2, this is potentially the biggest day of the three. If the ECB step back from Mr Draghi’s earlier comments the Euro might have a decent push down. The ECNB started damage control yesterday and this now looks a likely scenario. Not only bad news for the Euro but a clear sign of struggles for control in the Euro zone spilling out.
The market often ranges in NFP week, but with the Fed yesterday and ECB today  it may well chop around on the that first.

Technical Analysis
It’s a new month and Monthly pivot has come screaming down towards Weekly pivot. Daily pivot while still above weekly pivot has tucked in a bit closer. We currently have price rising towards a fallen daily pivot, in the last 2 months when we have seen this we have a 57% chance of breaking pivot, if it breaks we have an 87% chance of a retest, and a 75% chance overall price will end the day below daily pivot. So todays shorts are at full risk, longs are at reduced risk.
The 4H chart is currently has a lower high and a lower low, so the shorts are favored.

The Day Ahead –
Overall the market is likely to range awaiting the ECB, we will look for some entries, but need quick take profit 1’s and a move of stop to break even.
Bias- My overall bias is still short, I am sure traders are lining up to sell the peaks….
NO TRADE:
Short entry: Looking for a reversal bar off Daily Pivot, we only have a 43% chance of bounce here but if we get it, we will probably get a bigger move down. If not we will look to trade the first high after the beak of DP back to DP, and if DP is re-broken look for the first lower high.

Long Entry: WE would need DP broken and retested, would look for a conservative entry and enter on the creation of the next new high.

 RED News Today GMT I recommend staying out of the market around the ECB press conference
Tentative     EUR     Spanish 10-y Bond Auction 6.43|3.2
12:45pm     EUR      Minimum Bid Rate 0.75% 0.75%
1:30pm      EUR     ECB Press Conference
1:30pm     USD     Unemployment Claims 375K 353K

All the best
PBT