Needless to say there is many crosswinds from the EU/Greece situation. The Pavlovian reaction is if there is a bailout, the EURUSD goes up. No bailout the EURUSD goes down. What happens after a final decision - which brings into the forefront the moral hazard debate- is what is of a concern for traders.
For me, the risks are increased measurably and as we saw yesterday the sudden risks can be very dangerous and above all increase fear which we all know is a traders worst enemy. So staying on the sidelines until the dust settles is the best course of action. EIther that or lowering trade amounts and using stops.
Having said that, there are levels we can map out that are similar to the levels chosen prior to the release of a key economic report like the US Unemployment report. Looking at the charts, the key level to watch on the topside is the 200 hour moving average. This level is currently at the 1.3819 level. The market has gotten within 8 or so pips of this level on 3 occasions in the last 6 trading days but has not been able to extend above this moving average level. A move above should lead to further upside momentum with 1.3858 as the next upside target.
On the downside, the first key level is the 100 hour MA at the 1.3717 level. Below that level is 1.3684 support and then 1.3642 (low from yesterday) and 1.3619 the double bottom from Monday’s trade.
I would think the risk is to the downside but one never knows how the market is likely to react. So be patient but be skeptical. The markets are not all that conducive to logical trade lately. Plus we also have the Bernanke testimony notes which has the potential to cause some additional volatility today.
The Chirmans comments are scheduled to be released at 10 a.m. Eastern time, and are to unveil the central bank’s strategy to exit from its ultra-easy monetary policy.
Posts
0 comments:
Post a Comment