EUR/USD: London open; analysis and trade signals
Courtesy of Chifbaw.com and you can find more details on their website.
- Best: Sell EURUSD in between 1.2950/1.2960, SL above 1.2975 with targets 1.2920, 1.285, 1.2740, 1.25x.
- Medium: Sell EURUSD in between 1.2905 / 1.2915 with a scalping mentality (10/20 pips profit, quickly move SL to 0 for a possible trend reversal).
- The EURUSD will not make new highs (higher than 1.317) until Spain requests a bailout and the OMT is activated.
Yesterday, as expected a rebound has occurred in EUR/USD although not from the levels we were looking for. This morning the market is bearish on the US Dollar as a consequence of the re-election of Obama. We do not believe that this will last, and a risk-off in stocks will progressively materialize into USD strength. This morning EUR/USD is bullish and has still enough energy to rally further up, to become a nice short opportunity for a downward continuation. First good entry point is the retest of the trend line support that held the EUR/USD from falling several times before being broken on November 2nd (see violet dotted line). This trend line currently arrives around 1.2910 and represents an important resistance (“seller’s remorse”). Close to it, there is the 61.8% Fibonacci retracement from the top at 1.3137 at 1.2905. This makes the area of 1.2905/1.2915 a perfect opportunity for scalping (10-20 pips correction) during the early part of the London session while also looking for a reversal. There is still another risk event today that is the Greek parliament vote. A positive outcome can propel the EUR/USD further up. The trend line resistance from the previous tops (1.3137, 1.3020) around 1.2950/1.2960 will provide an excellent short entry if we reach it today. The 50% Fibonacci retrace is also located in this area at 1.2950.