Quality opportunities in a small ranging market

Hi

Im sorry we had no Blog yesterday, a combination of the US bank holiday, and a broken ferry bringing me back from my weekend. It was a good thing with little happening and a daily range of around 50 which always makes it hard to make a little money.
It was great to go well past 5000 page views last week, thanks again for your continued viewing of the page.

Context
Much was expected and little delivered in Fed Chairman Bernanke’s speech at Jackson hole on Friday. The market will now look to Thursday when ECB president Draghi is expected to announce a debt buying program to keep the cost of borrowing for Spain and Italy down followed by Fridays Non-Farm payroll and next week’s German constitutional  court decision as to the legitimacy of European Stability Mechanism. The fundamental picture suggests more tight daily ranges and some choppy price action.

Technical Analysis
The new month has started with the pivots in a nice bearish formation. We have daily above weekly, and in turn weekly above monthly. The short term bias is long.
The 4H chart is showing higher highs and higher lows. The current high is yet to be established and needs to be watched closely.

The Day Ahead –
We will want to enter the market cautiously as we see what volume returns after the long weekend in the US. With daily ranges so long we need to pick out the best opportunities and leave the est. Today we may get a couple of quality opportunities.
The pair is especially vulnerable to surprise news for the next week or so and still needs some caution.
Bias- My overall bias is still short, but I need to wait for some evidence.

 NO TRADE:
BEST Short entry: WE know the Euro tests the pivot about 80% of the time as such the first trade I will look for is the break of the recent low down to the pivot, with a stop above the recent high. It will be close to a 1-1 trade.

BEST Long Entry. The best long trade would see a break of the daily pivot short, then a break back up and through with a test of the DP from above. This would enable a tight stop and a target of R! or todays previous high.

Other entries
If price breaks the DP and tests from below  with a price action trigger this would create a short entry. Our alternate long entry is a break of the recent highs, a pullback to support and a price action trigger long.

News Today
3:00pm USD ISM Manufacturing PMI

All the best
PBT