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Mark Wogan: You were only supposed to blow the bloody doors off!

“I said you were only supposed to blow the bloody doors off!” Well its not quite got to that yet but Juncker´s apparent comment that if Italy wants “…further special treatment it would end euro…” seems to be paraphrasing Michael Caine´s famous line..

The Italian budget deficit issue appears to be ramping up into a crisis and its definitely having a negative pull on the euro even though it seems a bit over played to me from a strict economic sense. However, I guess after Greece, Brexit and Hungary et al openly in revolt at the EU´s immigration policy, the true believers in the single market have to draw the ´political´ line somewhere! And that line appears to be at the Italian border right now. Borders seem to be top of mind for the EU right now – the Irish border is also causing a little consternation lol.

Allowing Italy a larger budget deficit than that stipulated in the ´stability´rules is causing all sorts of political turmoil within the EU and its keeping a firm lid on euro upside at now .

So what’s in store for the EURUSD pair today?

As I said yesterday, my read of the bigger picture green is still that we can get some movement to the upside as long as we don’t get a sub 1.15 daily close, Below this level tilts the odds in favour of a bigger shift downwards and after yesterdays close below the key 1.1580 it’s looking more likely that this is where we are headed.

However, the fact that I don’t know where we might be going right now doesn’t stop us trading because that is what trading is all about. We try and buy or sell at a good price to sell or buy at some later point where we can turn a profit. As day traders its not vital to concern ourselves with the fundamental economics behind our pairs medium to longer term view as long as we can make a dime in the interim on the shorter time frames!

In which case I’ll be looking at the hourly and 5min charts to give me a steer for intraday entries (and targets). For the  moment the 1.1520/30 level is on my radar (although by the time this is published this may be óld´news) as there will be plenty of liquidity just below here and the one constant in trading is that price is magnetically drawn to liquidity pools on the charts.

Without going into detail, what I mean by liquidity is that resting sell stops opened by previous ´longs´ provide a ready source of supply to match with traders who want to buy down here (demand). So our options are to sell above this level or to wait and see what price action gives us once or if we get there. I will sell above if I get a good entry on the 5m chart as long as I don’t have to chase price.

Top Tip: Chasing price to get in a trade is always a bad idea!

We have an interesting day ahead so time to get rolling. Have a good day amigos 🙂

EURUSD Daily chart

EURUSD Hourly Chart

Please note: All opinions expressed above are from the author and not necessarily shared by The Armchair Trader. All financial investments involve an element of risk. The value of your investment may fall as well as rise and you may get back less than your initial investment. With Spread bets and CFDs your losses may exceed your deposits.

Mark Wogan

Hi. I started my investing / trading career in 2000 and since 2011 I have been trading on a full time basis.

My focus here will be the currencies and in particular the EurUsd pair and I will post my charts on a daily basis marking up the levels I´m interested in and comment on the bigger picture context and anything else I´ll be watching out for during the day.

I also do a little coaching on a one to one basis so if you´re interested in learning how to trade just give me a shout and we can have a quick chat.

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