Quote of the day: A good head and a good heart are always a formidable combination. - Nelson Mandela

EURUSD

Trading strategy: standing aside

The World Cup 2010 came to an end - Spain winning the final over Netherlands. There were some great games, even though most of them could have been way better. Frankly, I won't miss the annoying vuvuzelas or all the referee mistakes. Congratulations to Spain and to Paul, the octopus! Can we ask Paul what level will be reached by EUR/USD first? 1.1 or 1.4? back to our things. The euro lost some ground against the buck on Friday as it couldn't hold gains near $1.27 after few failed attempts to break higher. Although short-term sentiment remains positive, downside pressure remains a bit high and a trip down to 1.2500 is possible. The last COT chart shows that net short EUR contracts are back to levels of January - at -38k from -73k a week ago. If the euro continues to challenge the upside at same pace, in 2 or 3 weeks it may get around $1.3 and the COT figures will turn positive. Meanwhile, we should keep an eye on the 1.2500 level in case of an extended pullback, or above 1.2650/70 if uptrend resumes before test the lower side. Potential break above 1.2650 intra-day resistance would confirm that the overnight decline to 1.2590 was corrective. Current exchange rate is 1.2580 @06:18 GMT

Support: 1.2560/90, 1.2500/20, 1.2465, 1.2400 and 1.2300 Resistance: 1.2650, 1.2700/10, 1.2750 and 1.2800 Market sentiment: long term - bearish, medium term - bearish, short term - bullish, intra-day - bearish

EURUSD

EURUSD 4hrs chart 7-12-2010
EURUSD
EURUSD COT 7-12-2010

More setups

GBPUSD

GBPUSD
GBPUSD 4hrs chart 7-12-2010

AUDJPY

AUDJPY
AUDJPY daily chart 7-12-2010

USDCAD

USDCAD
USDCAD 4hrs chart 7-12-2010

EURAUD

EURAUD
EURAUD 4hrs chart 7-12-2010

Have a great day!