Price action is surrounded and may surrender

Hi

Well what a beautiful trade that was yesterday with our preferred short entry playing out exactly as illustrated. We had the break of the base of the descending triangle followed by a test of the base and trendline. We got a high test bar as price action confirmation to go short and price went straight, if slowly, down to our support line target. While everything we offer is educational in nature, anyone who took the trade should be about 2% up today.

Context
European bond buying and US monetary policy easing are changing the financial picture. The Euro has rallied and is now consolidating and awaiting direction.  We are in the calm after months of major financial announcements and discussions and are now waiting as we digest the information and hopefully head back to a more normal trend. The next major news is likely to be Spain asking for a full bailout. You imagine that’s already partially priced in.

Technical Analysis
While it’s great to see the DP pull back towards the weekly pivot and remove a little of the overextended picture the pivots are once again not the first thing my eyes are drawn to today.
The first thing I did was see the layered support and resistance levels below and above where price is and wonder how I can make any money today. Price action is surrounded and may surrender meakly today.
To go short price must break support at 1.3030, the weekly pivot and the round number of 1.3000. This seems a tough ask if slightly easier than the journey long where we have Daily Pivot, yesterday’s support 1.3090 and the recent 1.3110 level all in the way. With price recently wandering around aimlessly it’s hard to see it taking out multiple levels without some major news stimulus.
Our pivots remain in bullish order but the distance from monthly pivot to its cousins weekly and daily pivot is reaching danger level. We are a little over extended and longs must be watched because of this.
Still there has been no test of DP.

The Day Ahead –
I just cant see enough puff long to take out the levels and the levels are to close to make much trading between so no longs for me today. If we break the support area I would expect that we will go to WP and a break below that will have some alarms ringing on the rally, and some space to trade.
Bias- My overall bias is still short, but the market is the hands of the Bulls at the moment
 NO TRADE:  Im not trading long today
BEST Short entry: I would like to see a break of weekly pivot and a test of 1.3000 then a bounce back and test of WP. A price action lead short from there could be very interesting. Target 1 TS2, and Target 2 DS3.

BEST Long Entry.. With out news I think moves up could be to choppy for me.

Other entries..
RED NEWS
3:30pm USD Building Permits
5:00pm USD Existing Home Sales

All the best
PBT