Good Morning, Friends, Despite the initial dip yesterday evening, the reaction to S&P’s cut of Spain’s debt ratings was muted – that is, the world didn’t end – and Italy managed to get some paper sold without undue stress. Thus far this morning, we’ve seen a lot of pressure from institutions adjusting their portfolios for month end, which in most cases has entailed buying Euros/selling Dollars. Among the names mentioned were a number of central banks, which regularly adjust their holdings of various currencies.
The hourly chart of EUR/USD shows that an inside vertical bar may be forming, which can, as Todd demonstrates in his courses, be very useful as an indicator of future direction. Stochastics are becoming overbought, and I’ll be watching to see if we can possibly get a quick reversal off the 1.3270 high. As the chart suggests, I would look for support between 1.3215 and 1.32. The bottom of the range should be defined by 1.3160, where we hadÂ heavy buying by Middle Eastern names in the early morning.
Best of luck today.
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