I took in some good pips along the way drinking Mai Tais on the beach and sat out Friday, but this week we'll look to untangle this mess in Europe.
Daily Outlook: The big fundamental problem here is just how reluctant Germany was to get involved. There was a Eurozone meeting this weekend where leaders pledged to defend the Euro and to offer Greece more aid which is GOOD for the Euro. However this is happening months after investors wanted it to. Compare that to the U.S. where aid was passed out like candy last year. And that is the real difference - in the US investors are confident the government will step into help any one of the states because the government has already done it time and time again. In Europe though well-off populaces, like the German public, is very much against financially supporting the debt-laden Greeks. With German elections coming very soon this further complicates the picture.
And suddenly the US dollar looks like a safe-haven of security!
Technically we opened with a bullish gap of almost 200 pips - huge by any standard - on the news of Euro support for Greece. I will not look for that rally to continue as the doubts in Europe, doubts in US stock market and general financial fragility continue to drive USD buying.
Trading Idea: My primary trade for the day will be a short in the vicinity of 1.3060 - where former falling trend support and now resistance is. From 3060 targets are 1.3030, 1.3000, 1.2970, 1.2940 and 1.2910 - for 150 pips profit. A more aggressive trade would be a short in the area of 1.3000 and even more aggressive trade is a long at 1.2800.
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