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Daily Outlook: EU has been consolidating for the past few days under a longer-term falling trend resistance (top blue line) and a short-term rising support (bottom blue line). We expect a break of either of these to produce at least a mild *pop* to snag some pips off of. Until then we expect more consolidation within this tight range.
On a longer, more fundamental outlook the EU is getting more beat up than usual in the press as the S&P has indicated they are prepared to downgrade a host of EU countries if the summit on the 8th and 9th is not able to resolve some of the sovereign debt issues. A read of their statements indicated they are ready to downgrade France up to two notches. If this happens expect the normal market reaction would be for the USD to gain across the board but in today's worldwide game of who can print the fastest all bets are off - we will stick to our technicals :).
Trading Idea: For now we are slightly more bullish than bearish but will look to trade a break in either direction. On a topside break of resistance (currently at 3465 and falling) we will target 3485, 3505, 3530 and 3560 for 95 pips total. On a downside break of rising support (currently at 3325 and rising) we will target 3305, 3285, 3260 and 3230 for 95 pips total. In PRO both breaks will trigger an email alert if you are subscribed to EU S/R alerts.
There is of course plenty of room for day traders to scalp the insides of the the consolidation triangle.