Large EUR/USD Rally Tilts The Scales
PipHut | Jul 11, 2013 06:33AM ET
Whoa! What a day! First off was the giant USD drop, across nearly all pairs, that created a massive rally on the EUR/USD to the tune of 450 pips! I can’t remember the last time we’ve seen a rally or dip this large in just a few hours. What caused this giant USD weakness? Basically Bernanke, the Fed’s Chief, made some dovish statements in the FOMC Q
Yesterday’s EUR/USD Signal Result: First off there were no trades triggered yesterday – not a single one, despite the fact that we were looking for setups on several different pairs. Basically the rallies just moved in the opposite direction of the trend which skips our entries as we trade with the trend 99% of the time.
Today’s Signal: Yesterday’s impressive rally is impossible to ignore, and you have to go to the weekly charts just to get a little perspective on the overall direction of the pair. If this week closed today we would have a significant bullish engulfing on the weekly chart – a definite bullish signal – but we still have a couple days to go before the weekend.
Taking that rally into account on the 4h charts (which blew past major 1.30 resistance with ease) we are now short-term bullish and will look for reasons to get long on dips – starting with a long on a resistance break (if one forms) with a TP of 80 and a SL of 50.
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