FX Commentary EUR/USD December 21, 2011
Well it looks as though the Santa rally is on!
Yesterday I was sceptical of a rise mainly being caused by a short covering scenario. However a 300+ point rally in the Dow is encouraging. I am still a little concerned that the Euro had no follow through during the US session but things are looking better. All of the data reviewed yesterday was positive as Germany showing they may fair better than I expect with the EZ crisis and housing data from the US was encouraging. I don’t think anybody is actually out of the woods yet but missing the Santa rally this year would have been very discouraging and show that the pessimism is persistent. There is still hope anyway. There is no high impact news scheduled for today so I anticipate the rally has a good chance to continue. There has already been a momentum push up at the Tokyo open and there don’t seem to be much selling going on. A break of yesterday’s highs is not out of the question and the test and break of the daily close on October 3rd at 1.3173 is possible if this rally continues. At this point the only thing that could stop this rally is some disappointing tape bombs out of the EZ which is unlikely in my opinion.
Intraday I would be looking for clues that there is no interest in selling. I would want to see some faded moves to the downside. (low volume moves that the median line moves down) accompanied with strong moves up. Right now the euro looks to be going thru some accumulation. A stop run below this small range would tell be she is ready to break to the upside. This accumulation is right at the mid line of the 90 pip range and holding above it which is encouraging for the move up also. If there is a full retracement of the intent move then I would be waiting for more clues to direction before I enter. And it’s looking like the break may be sooner than I thought. Notice the chart LOL
This will be my last commentary for the year as I typically take these last weeks off to enjoy time with my family. However I will soon be posting trade videos of all the trades I personally took over the last 4 weeks for you all to hopefully gain from.
Have a great holiday season and a Prosperous Â New Year.