Not to be left out though I then looked for a rise with two strategies to enter: a bearish candlestick near 1.3500 resistance would have put me in the market in a hurry, or if we saw a rise through 1.3500 I would place a sell entry again below the price and below 1.3500. That is called not standing in front of a moving train! I'd rather catch it on the way down when it is moving in my direction and sacrifice a few pips to be able to weed out false breakouts. Regardless, no candlestick and no further drop ever happened and I stayed out of the EUR/USD for the day.
Daily Outlook: Risk is back to being the central driver of the EUR/USD (if it ever left). On one hand we have the Fed saying that they will keep rates low for an extended period and the Chicago Fed today saying that it would remain low for at least 6 months. That is Euro positive as it has the higher interest rate so money will flow into it as opposed to the lower interest rate dollar. Tempering that flow are two big items: 1) positive US economic news means a coming US interest rate rise will begin the narrowing that interest rate differential; 2) and this is the biggie: Greece. And Portugal, Italy/Ireland, Spain (PIGS). Support for Greece within the EU seems to ebb and flow every day, and investors are concerned a default by Greece could lead to an extreme drop in the value of the Euro on worries about the strength of the union.
So even though I'm a primarily technical trader I have an ear to the news more than usual these days as it seems like every official that mentions the word Greece has the potential to change the direction of the markets. You can read the latest forex news here and view the forex calendar here (FYI there is a US housing report tomorrow at 15:00 GMT).
Trading Idea: Despite the rise yesterday we did make another low low on the day after dropping hundreds and hundreds of pips in the past few days, and after making a very bearish break of the rising bull channel last week. As such I will look to sell, and we have a key resistance coming up at 1.3590-1.3600. This level was key support on March 18th and 19th and is also around the 38.2% fibonacci retracement of March 17th-March 22nd low). I will look for a bearish confirmation to sell (false breakout, bearish reversal, etc) at 1.3590 with targets at 1.3565, 1.3535, 1.3505 and 1.3475. A sustained break above this level will open up a re-challenge of 1.3620 and 1.3650.
I will closely eye the bearish challenge of 1.3500 as this is a key support level once again.