5:30a GMT - Markets were relatively calm yesterday as... Oops, wrong post :). As most everyone noticed we saw a fair amount of volatility in the 16:00 and 17:00 gmt candles as the pair jumped almost 150 pips from it's low to its high. For those curious the general consensus is that the jump was caused by rumors that Greece would receive a bailout from the European countries in the form of financial aid to keep its debt problems at bay. This in turn caused an increase in risk appetite, thereby driving up the higher-yielding Euro against the greenback.
Daily Outlook: That is the fundamental picture. Technically it was just another day. As you can see in the chart below no major support or resistance was broken. Rather we just saw a continuation of the consolidation that we have been seeing for the past several days, furthering the triangle consolidation pattern formed by the rising trend support and falling trend resistance. 1.3850 is the key resistance to watch here.
Trading Idea: A break of the falling trend resistance should lead to a challenge of 1.3850. If 1.3850 is broken that immediately puts 1.3960 and 1.4000 in bulls sights. However until that series of events happens (and 1.3850 is broken) I will continue to look for selling opportunities in this more attractive price range. Targets for a 1.3850 short are 1.3810, 1.3780 and 1.3740. For a secondary trade a break of the rising trend support opens up another challenge of 1.3600.
I apologize for the complex chart below but I tried to illustrate the different routes I am watching for today.