6:26a GMT - What is it about Fridays that makes me not want to trade? Huge drop in the EUR/USD yesterday that kicked out my stop for a small loss (that's why we always use stops and use good money management, right?) The pair did take an initial bounce of of 1.4950, good for any scalpers, but reversed just short of our first target under 1.4985. We also have some big event risks coming up shortly this morning on Eurozone and German economic numbers. I've noticed that frequently before a news event big market makers push the market in the opposite direction that the news will push it before a event risk - presumably to stop hunt. If that is the case we could see a big retracement in the pair tomorrow.
The other scenario I see as likely is a consolidation between 1.4930-1.4810.
Trading Idea: Given the event risk, the big jump yesterday and the general lack of clear direction in the market I will be sitting on the sidelines tomorrow. For aggressive traders I might look for a sell signal between resistance zones at 1.4900-1.4930 with targets at 1.4870, 1.4840 and 1.4810.
Side note: I've got some exciting stuff I'm working on this weekend for PipHut for you. I don't want to ruin the surprise or get your hopes up but I should have something pretty neat for you on Monday if all goes well.