New Signal Post for Chatting

This is a re-post of today’s signal for new comments. Please start commenting on this post as the last one was acting funny.

Recap: No EUR/USD trades taken off yesterday’s signal. Bullish day yesterday as the pair rallied hard from Wednesday’s big drop.

Daily Outlook: A lot of indecision in the markets right now as the price has ended up just where it started to begin the week, forming a nice looking doji on the weekly chart. This indecision could signal a possible reversal in the pair though I think many traders are waiting for the 1.31 resistance zone to start shorting so this very well could just be a false signal.

The big news of the day is of course the release of the bank stress tests, though as some traders already pointed out many of these results have been leaked already. Add this to the fact that the tests don’t include sovereign debt risks, at least not publicly, and it makes you wonder how valuable these tests are. For anyone not familiar with what sovereign debt risks it basically is the amount of exposure banks would have if one of the PIIGS were to default. This is the main worry with the banks and for them to leave it out of a stress test tells us the results would not be pretty.

Trading Idea: It’s Friday and I won’t be watching the markets as closely today but there are some interesting trade setups that I might open a few small positions for. I am very curious to see how these stress tests will effect the market. Useless or not traders will still act on them. I’m still watching that 1.2850 pivot area: I’m bullish above this level and bearish below.

If I enter the markets today I’d look to long on a failure/false breakout of 1.2850 with targets at 1.2875, 1.2905, 1.2935 and 1.2965 for 115 pips.

A more aggressive trade would be a short on a sustained break below 2850 with targets down to 2825, 2800, 2770 and 2740 for 110 pips.

Finally a sustained breakout about 1.2915 is another aggressive long with targets up to 1.3000 for a quick 80+ pips.

Happy pipping and have a great weekend!

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