Intraday Update! - with markets still reacting to the Greek elections and, to a lesser extent, the French elections (which all but rule out tough austerity measures in France), we did an intraday update today to let the markets work out their kinks a bit. Enjoy!
Recap: The news out of the weekend is, of course, Greek elections which did elect the pro-eurozone parties however it remains to be seen if those parties can form a coalition government. Already doubts are beginning to crop up as the the austerity measures attached to the bailout are a sticking point for a quick coalition. The worse case scenario for the short-term would be if a coalition government is not reached the Greeks will go back to the polls for a THIRD election this year. The longer term threat of course is a Greek exit from the eurozone altogether.
Markets have predictably bought the rumor and sold the news. You can make any fundamental explanation you want (e.g. doubts of a coalition government, austerity measures, Spain worries, etc.) but, as always these explanations are just telling us what we've already seen and are therefore not useful for us day traders. We prefer to stick to our technical systems (swing trading) which give us forecasts of future moves (based on past moves) and entries/exits for those moves.
Today's Important News Events:
|05:00||JPY Bank of Japan Monthly Economic Report|
|*To see a more extensive list of news events (not just those we consider important), visit our Forex Calendar.|
Trading Idea: After opening on a bullish gap the EU has taken a nose dive, quickly closing that gap and dropping more than 200 pips in the process. We are bearish on the pair after it has smashed through support levels but will take a technical long on a resistance break with targets at 20/20/20/20 for 80 pips. We will tighten our SL quickly and looking to close and get short on a support break if one occurs.