Quote of the day: Leadership is a privilege to better the lives of others. It is not an opportunity to satisfy personal greed. — Mwai Kibaki
Trading strategy: short at 1.2780, stop at 1.2850(0.5% risk), 1st objective at 1.2730, 2nd objective at 1.2650
The euro is approaching last week’s bottom as intra-day support failed to hold yesterday at 1.2770, but it found support around 1.2680, formed by a rising trend line coming from August’s lows. I think there’s more room to the upside for a correction, which should aim towards yesterday’s support level around 1.2770, but downside remains favored due to extended weakness against the yen and the Swiss franc which are again trading at record levels. Given the high correlation between the 3 pairs – we can’t expect a recovery against the dollar while the other two are engaging record lows. There are fears and hopes of SNB and BOJ interventions since a few months ago, but they have yet to be seen. So you better don’t jump in buying those “cheap” pairs just because some news site says intervention is just around the corner and will back you up. It’s been around the corner for many weeks and it will happen, eventually, when less people expects it. Current exchange rate is 1.2711 @05:48 GMT
Support: 1.2650, 1.2600 and 1.2500
Resistance: 1.2770/00, 1.2850, 1.2900/20 and 1.3000
Market sentiment: long term – bearish, medium term – slightly bullish, short term – bearish, intra-day – bearish
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Have a great day and happy trading!