Forex EUR/USD commentary January 13, 2012
Its Friday the 13th and what does the market have in store for us today? Seems like the short squeeze is on. The ECB left its rates unchanged yesterday as expected. however the speech was so uneventful that the market seemed to think it was a good time to try and push out all the shorts they can for now. There was really no fundamental reason for the pop up other than the Spanish bond auction that went off so well that they sold twice the amount originally planned. To me this by its self is not all that encouraging considering all the crap going on with Greece. We will see what happens when the Italians step up to the plate today and try to sell some bonds also. This ought to be interesting.
It would also seem that the decoupling theory has literally blown up in a session. With US unemployment coming out a full 22k worse than expected I,m sure this added fuel to the fire underneath the Euro as the S&P dropped while the Euro was on a nice climb. However the S&P did recover and close a little higher for the day while the Euro did about nothing after London closed for the day. It seems the US dont buy into the coupling factor just yet but were happy to help out with the short squeeze LOL.
When I see days like yesterday I just cant help but think bank manipulation! Of course that is where the term short squeeze or stop run comes from. With the retail shorts breaking record levels every week according to the CFTC the smart money is going to do their best to push those out so the smart money can load up before the push lower they know is coming. There is just too many negative issues facing Europe working out this whole mess. Even though the powers at be say there is progress in the talks for the Greek debt write down they curiously never report what progress has been made. Sounds fishy if you ask me.
I could go on and on with this but I will leave some for Monday after we see this lucky day through and get to the charts. The daily chart looks mixed to me at this point. We did have a close above the close from Thursday last week signaling bullish tendencies. However price was rejected from the daily highs and closed just below the high from January 10th which tells me there may not be much interest in pushing price higher. So the only thing I will do is watch what the market tells me and wait and see. There is a 50-50 chance it could go to the 1.2900 or even 2950 level with more of the short squeeze. Or get rejected here and make the push south. When i think of more potential manipulation the run up seems slightly more likely but the only reason in my mind is to push the shorts out. We will see.
Be careful out there guys.