Good morning traders.
After a strong reversal on Tuesday our chosen weapon of mass financial abundance gave a shrug and had a day off yesterday:).
Not much to report in which case other than the 1.1420s pivot I noted did the trick and stalled any further push to the upside. If you set off a short here you´ll have done well but if you didn’t no sweat as I didn’t label it as one of S or R model strategy levels. Other than that – it was a bit quiet yesterday
We did get a nice divergence pattern on eurusd versus the Usdx (USD index) which I´ve talked about previously.
As you can see below the Usdx failed to make a higher high when the eurusd made a lower low. These patterns are not infallible due to the mathematics behind the derivation of the Usdx but when they occur its worth taking note and taking a shot. You´ll most likely get some profit out of it more times than not. If it also occurs at a significant level that increases the odds.
Nothing particularly new to note from a macro perspective.
It appears Brexit may continue ad infinitum as it now seems that UK Parliament cannot even agree to discuss possible deal scenarios amongst themselves. This is getting truly beyond the pale. After PM May tried to break the deadlock by inviting cross party talks (and there is case for her having done this much earlier), Jeremy Corbyn, the opposition leader, said he would only join in if certain pre-conditions were met.
The world must be looking at the UK right now and thinking is this really happening in the mother of all Parliaments? Words are starting to fail me.
In other news it is thought that Trump is ´inclined´to impose tariffs on EU car imports. Whether this is simply a negotiating stance remains to be seen. If it is enacted it is not good for the EU, very bad.
On a lighter note, lets take a look at the charts:).
The Daily Chart
As we continue to grind down the chart I have re introduced the 61.8 Fib residing just below the recent lows at around 1.1180s. If we don´t get any traction to the upside then this has got to be in play in the coming weeks (days even). 1.1350 looks to be retested and maybe the up sloping trend line may have an impact. It certainly doesn’t look very bullish now that the upside break has confirmed as a failed breakout.
The Hourly Chart
Levels as per. With nothing on the data slate and bearing in mind Draghi´s comments from the other day which focused heavily on the downside risks facing the single market, if I were a betting man (lol) I´d be watching any upside levels to get short. Just a thought.
Stick to the plan and trade the levels is the order of service for today.
Right, enough from me – go gettem!