5:14a GMT - For those of you (myself included) who had sell entries yesterday at 1.5015 we just barely missed that level (or at least my broker did) by a razor-thin 0.5 pip. That was followed by an almost immediate 60 pip drop. This was of course after Bernanke's speech, as many of you commented on yesterday, sent the EUR/USD into a frenzy. For those of you that are curious the comments that supposedly triggered this panic were fairly mundane:
“Today, financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible.”
He is not really telling us anything we didn't already know - the only surprise here is how the market reacted. Which makes me think this could just be a stop-squeeze in illiquid markets during news.
Daily Outlook: Nothing in the technical picture actually changed since yesterday, as you can see in the graph below so it is business as usual. Because price action did advance quite a bit I am moving up my entry a little (closer to the 1.5050 resistance) to get a better risk/reward ratio.
Trading Idea: Still looking to short above the 1.5015-1.5050 resistance area, though now I will look for an entry higher up, closer to 1.5050 to get a good risk/reward ratio. Targets from 1.5050 are 1.5015, 1.4980, 1.4950 and 1.4915.