Will price be able to resist the allure of its previous mistress 1.2908

Hi
Welcome along readers I do hope your trading is going well

Yesterday saw a continuation of the move down, with the 1.2908 level tested and then broken and price continuing down to Monthly pivot.  We didn’t get the perfect entry as per the blog but I suspect many of you will have profited on the short, we asked for an aggressive sell off and then a retest of weekly pivot and price turned about 15 pips short of weekly pivot. However some of you will have got in on the strength of the sell and then the doji type reversal bar. The price action is a great example of what Isaac Tekeste spoke of on Trader Talk radio where the level is first tested and the likelihood of a break is sign posted by the lower high.  This pulback and go theory is one that Geoff will expand on in future episodes.

Context
The market continues to be fundamentally driven with technical trading more difficult. Both Merkel and Draghi have spoken tough on Greece, and with the market now grudgingly excepting the “Obama” Us Employment figures the market has only had eyes in one direction.

Technical Analysis
The Daily Pivot has crossed the weekly pivot, and all pivot crosses are important, momentum at least is down. Today is the second consecutive day the pivot has moved the same way, it hasn’t got to 3 consecutive days in the last fortnight so today is important. Another move down and some normality might be available to us. The daily Pivot is middle between weekly and monthly and middle is often a sign of indecision. So its all pretty mixed but I like the look of today…
The closeness of Daily pivot and the 1.2908 resistance level will act like a magnet to price. Price has spent more time with the level than the Clintons have spent together in their marriage and another visit looks likely.
The 4H chart is over sold at hints at a pull-back
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The Day Ahead –  
We have a couple of scenarios today. The first is price goes back to the Daily pivot, we know price tests DP most days and will try and grab a few pips if it does. That’s scenario 1, the other is a break of Monthly pivot and the Euro will be exposed to the short side.

Bias- My overall bias is still short, but the market is still pretty mixed at the moment.
 NO TRADE:  I wont trade the area between Daily and Weekly pivot.
BEST Short entry;  If we get a test of Daily pivot I will be looking for a price action reversal or a lower high as an entry short.
BEST Long Entry.. A break of the recent highs and WS1 would see me looking for an entry back to Daily Pivot.

Other entries..   If we don’t get a test of DP then when price breaks MP if we are coming from a lower high as we would be now I will enter 5 pips below, with a  stop a bove the last swing high. I will take profit at 1-2-1 and allow some of my trade to ride. This could be a good winner.
If we are coming off a higher high, I will wait for the break and sell the first lower high after the break, below the MP.

 NO RED NEWS Today

If you have any questions you can submit them here or email me at Paul@paulbotterill.com
All the best

PBT