Daily Outlook: Our short from yesterday's signal (which we took in the comments) got +65 pips in the profit but was unable to breach 1.34 and turned back on us. We ended up closing out at +20 and that pair is back to where we entered yesterday at 3490. Today we are tracking another falling trend resistance, shown in blue/black below:
A glance at the 4h charts shows that the EU is extremely bearish, going from above 1.4200 to just over 1.3400 - an 800 pip drop in just 3 weeks! This drop is a good reflection of the problems that have been waving through Europe the past month. Even with the super committee in the US failing to find any middle ground on debt reduction the short-term picture for the Eurozone is still worse.
Trading Idea: Despite the bearish technicals and fundamentals we will look for a long on a break above today's falling resistance to produce a nice *pop*. That resistance is currently at 1.3540 and falling, and we will target 20/25/30/30 pips for 105 pips total.
We will also look for shorts under 3540 with candlestick confirmation and targets at 20/20/25/25 for 85 pips total. 1.3400 is the next major support and we will look to close and long near 1.3400 with good candle confirmation.