EUR/USD continues to drop but found some support when reaching 1.23. Any bounce that does not exceed above 1.24 will probably be used to enter short positions. I expect price to reach 1.2275.
We need to remember that today is Non farm payrolls Friday. Markets will be volatile and price can decrease or increase with as much as 50 to 100 pips after the publication of the NFP report. An outcome that is better than expected would in general weaken the US Dollar as this would increase risk appetite and vice versa.
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EUR/USD 60 min chart
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Last edited by Alejandro Zambrano; 06-01-2012 at 05:42 AM.
London session review and outlook June 1 - 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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Even though price has been trading higher since June 1 the overall trend is bearish as long as we trade under 1.2550. 1.2550 is a major high created in the 4 hour time frame roughly 24 hours ago and as long as we trade under this high the path of least resistance is lower and I expect price to reach 1.24 and possibly 1.2350. It will at least take about 1.5 hour before we see a reversal.
Only a breakout above 1.2550 would turn the overall trend bullish - if this happens I expect price to trade to 1.26 which is today’s R2 level of the pivot point indicator.
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EUR/USD 60 min chart
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EUR/USD trend remains bullish in the very short term but looks poised to corrected part of yesterday's gains as long as we trade under 1.26. As we can see below the 1.25 level is a level where we are neither far off from the 1.2440 low nor too far from the 1.2580 high. I therefore prefer short EUR/USD positions as long as we trade under 1.26 expecting us to reach 1.25.
Given the short term trend we would need to expect a bounce from the 1.2450-1.2500 area looking to reach 1.2550 once again. I would however be careful if trading this move as it would not surprise me if we just create a shallow bounce just to trade lower and reach 1.24. Right now I would however not count on this third step rather just work with we have in front of us which is a correction to the 1.25 level.
If we trade above the 1.26 level the trend will turn bullish but will also be overbought thus I would turn neutral and would need to reassess the situation.
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EUR/USD 60 min chart
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London session review and outlook June 1 - 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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EUR/USD finally dropped under 1.2540 and that is why we are now trading just 20 pips above 1.2440 which is Wednesday’s low.
I suspect that we will continue to trade lower and reach 1.2450 and in case we drop under 1.2440 we might reach 1.2410 but in this zone its likely that profit taking will kick in - taking price back to 1.2525.
I would not necessarily buy a bounce rather sell the correction to 1.2525. We had our opportunity to go short on the breakout under 1.2540 which is the main setup we presented yesterday.
As usually when trying to sell a correction it’s important that we reach a interesting sell level - we can use fibonacci from the most obvious high 1.2630 to the new low (needs to be created first) - after we identity a good sell level (1.2550 is such a level) we can use the smaller time frames as 5 minute time frame with a 20 moving average (MVA). When the 5 min time frame is trading lower we have created a short term reversal – this will allow us to minimize the stop loss and maximize the potential gain. This does not work all the time especially if we have important news coming up which will affect the 5 minute time frame trend – but works good enough that its worthwhile trading.
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EUR/USD 60 min chart
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London session review and outlook June 10 - 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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We have barely corrected the weekend gap and might continue to trade to 1.2550 before traders enter the market with conviction.
The short support at 1.26 does not look like it will hold right now - we would need to give price an additional 1.5 hour before traders might consider to go long at 1.26.
Overall bias: bullish as long as we trade above 1.2490 expecting to found support and reverse close to 1.2550 - then aiming for 1.2650.
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EUR/USD 30 min chart
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London session review and outlook June 11 - 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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Price reached support overnight and has over the last 16 hours been trying to carve out a low. Bullish traders are currently dominating as they just created a 35 pips candlestick from low to high in the hourly time frame. This candlestick dwarfs the rest of the candlesticks and marks the open of the European session - the opening usually sets the tone for the rest of the day.
Given the overall trend where 1.2430 is major support and 1.2650 is major resistance it would not surprise me if we trade to 1.2575 which is to some extend fair value given the bullish trend. In case of a range without overall bias we would aim for 1.2550 which is the middle of the 1.2430-1.2650 interval.
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EUR/USD 60 min chart
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London session review and outlook June 12- 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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Price has been range trading for the last 24 hours but price now looks ready to leave this range and trade to 1.2575 as long as we trade above the 1.2440 low. A move to 1.2775 would also confirm our overall bias that we will trade to 1.2650 over the next few sessions – we are very well aware that Greece will have elections this weekend but it still remains two trading day until traders need to reduce their risk.
We have two lows to work with if we want to trade this short term bullish setup – either traders will place stop loss orders below 1.2470 or 1.2430/40. As the overall trend is not strong it makes more sense to use 1.2330 low to avoid getting stopped by random noise.
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EUR/USD 60 min chart
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London session review and outlook June 13- 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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Alejandro Zambrano
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1.2550 is offering some support but price can very easy slip under this level and reach 1.25 which right now seems to be the preferred level to enter long EUR/USD positions. As long as we trade above 1.2330 the bias is bullish and we should expect to reach 1.2650. We have also the possibility to trade the breakout above 1.26.
A decline under 1.2430 open up for a decline to 1.24 and the 1.23 low, thus short positions are preferred under 1.2430.
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EUR/USD 60 min chart
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London session review and outlook June 14 - 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
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Alejandro Zambrano
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