By: Christopher Lewis
EUR/USD continues to irritate a lot of traders. The Friday session was a perfect example of why. The initial move for the session was higher, but the nerves about the European Union issues came back, and as a result we saw the pair fall back down to form a shooting star.
The pair will undoubtedly be moved by the Monday meetings involving the dolling out of bailout funds for the Greeks. While there is little chance of the EU actually denying the funds, (after all, if they did – who knows where that will lead.) there is a possibility of yet another delay. With this in mind, a positive outcome isn’t necessarily a foregone conclusion.
The reality is that the Greeks are in the driver’s seat on this one. They will get their money, no matter what as the rest of Europe will take an enormous amount of pain if the Greeks aren’t saved, and they know it. It is the rest of the union is at risk, and they will pay their extorters. The ability for lawmakers to drag this out will be shown in the near term, but in the end there simply is no alternative. However, the Greeks will default eventually – it just won’t be anytime soon.
Tight Range and Shooting Star
The candle for the Friday session simply puts an exclamation point on the fact that the pair just can’t make its mind up. The ability to suddenly change at the drop of a hat has made this pair one that can only be traded for a very short time period, and because of this we can only follow the obvious levels at thing point.
.jpg "EURUSD Daily 2/20/12")
The 1.30 level extends down to the 1.29 level as massive support. It seems that every time the pair gets below 1.30, some kind of announcement comes out to push it up again. Hard to think someone isn’t trying to manipulate the market there. The 1.3250 level is massive resistance, and as a result I think this pair will stay in the area unless something really gets going in the meeting on Monday. (Good or bad.) With this in mind, I am selling on a daily close below the 1.29 level, and am willing to buy above the 1.3250 level. In the mean time, hang on for more noise and drama.