5:36a GMT - The bears let the bulls get a little glimmer of hope last week as bulls pushed the pair up almost 200 pips from open to close (on the week). However trend resistance held and the pair dropped over 200 pips giving us a bearish candlestick for the week, another lower low and lower high and another confirmation of the bearish bias. Trend resistance (connect highs of 1/12-2/2), which has been on my charts since Feb 5, held beautifully last week and ultimately sent the pair plummeting. Of course fundamentally the biggest news was that of Greece needing a bailout to stay afloat. The help promised by the European Union was enough to send the pair into a bit of a rally last week, but as the (lack of) details later emerged risk aversion crept back into the market and the US dollar rallied against the Euro.
Daily Outlook: More details on the supposed bailout emerged this weekend in the form of a German opinion poll which showed a majority German citizens are against giving Greece any aid - in fact many think they should just expel Greece from the EU altogether. This sort of uncertainty adds risk to the markets and risk is good for the USD, further confirming my bearish technical bias. As such I will continue to sell going into the week, and will look for a retracement to the resistance in the 1.3700-1.3720 area.
Trading Idea: From 1.3720 the preferred short targets are 1.3690, 1.3655 and 1.3620. On a side note an effect of all this uncertainty in the market could be an extended range trading week, though the parameters of this have yet to be defined.