Daily Outlook: All eyes are on Greece and Italy as their new governments will attempt to lead their financially struggling countries out of the metaphorical toilet. One would have expected that such news would have rallied the Euro higher on open, especially since the new Prime Minister for Greece is the former VP of the ECB while his Italian counterpart is also of the economist ilk. The markets barely gapped up this morning and are already trading below their open price:
While those news events are likely driving the movements behind the currency pairs we will continue to trade the technicals, as we always do, to put the pips in our pockets. Remember: technicals and fundamentals are birds of the same feather. Technical traders don't deny that fundamentals move markets. But we also acknowledge that the mass emotions of the markets, and the conglomeration of fundamental data shows itself on the charts. So for example trouble in Europe over a period of months will be viewed as a series of fundamental data to Fundamental traders but to Technical traders it will be viewed as a strong bearish downtrend. Both accomplish the same thing - technicals, in our opinion, merely provide us the exit/entry points we need. The other sad truth about fundamentals is that by the time that most news reaches the masses it has already been in the hands of large hedge funds for a hours or days - which in the era of high frequency trading is an eternity. Technicals allow smaller traders to shave the pips they need off the larger moves caused by the big banks, like feeder fish hanging around a shark.
Alright, our technical rant is over! On to the trading setups:
Trading Idea: We are tracking a rising blue trend support November 10th and November 11th lows shown on the chart above and will look to get long above it and short on breaks below. Primary trade is a long with candlestick confirmation on top of this support, currently at 3715 with targets at 3735, 3765, 3795 and 3825 for 110 pips profit. On a break below support, currently at 3700 and rising fast, we will short with targets at 3680, 3655, 3625 and 3600 for 100 pips potential.
Good pipping today!