EUR/USD: Still in range-trading mode so look to sell rallies

The Spanish bail-out news is undoubtedly giving the EUR some bullish impetus and short positions which had been growing again are now getting cut. I nevertheless see no reason to abandon the recent range-trading mode and I will look to sell any exhaustive rallies to 1.3050/60 with an obvious stop-loss level above 1.3100 and the double-top neckline. I’ve also just reduced my AUD/JPY longs slightly at 81.10 as it seems to be struggling somewhat and I’ll now chop the balance either breakeven at 80.68 or at 81.68 for a clean 100 pip profit. It’s called the ‘sleep-easy’ trade.

  1. I think the market is going to price in the bailout now, and we shall break above the trend line resistance around 1.3020 (the usual american bullishness will show up again). And after that, a small coffee break in the 1.3050 would throw us back down to 1.3020 before we go up again closer to 1.31. So today will be consolidation in the 1.30x imho before further action towards 1.317x in the coming days. I still maintain no breakout of the 1.317 until official request comes.

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