Daily Outlook: The EU took a nose dive yesterday after some long bearish wicks preceded the drop at the 08:00 candlestick. 1.4350 more or less held, however, sending the price climbing higher in what very well could be a dead cat bounce - a term meaning that the rise is temporary and will soon drop back down.


The pair certainly does have nice resistance above it in the form of a new resistance line (top blue line) at 1.4450 and the more intraday top yellow line which is currently around 1.4480. The first resistance line at 4450 offers the most immediate entry point (with candlestick confirmation). CandlePRO did kick out a bearish doji on the last candle but the profit factor was pretty low on it (1.15 - at least 2.0 means that on average backtesting won trades twice as much as it lost) so we'll wait for more confirmation.

Trading Idea: All that being said it is still Friday, and with Bernanke's big speech today (event risk) we will stand aside and let the markets fight it out until Monday. For those aggressive traders looking to nab pips today our primary would be a short on better candlestick confirmation near current price (1.4440-1.4450) with targets at 1.4420, 4390, 4360 and 4330.

There is also another aggressive short to be had on a sustained break of the most recent rising trend support line (bottom blue line) at 1.4415 with targets at 1.4385, 4360, 4330 and 4300.

Have a great weekend everyone, see you Monday :). We have some exciting announcements next week about the site too!