USDX headed to the bench for oxygen in the European session after what has been a dramatic move higher for the week. We still prefeer this downside to be corrective while above 74.90 and 74.20 today. The corresponding levels I’m watching for the EUR/USD are 1.4300-1.4340 and the 1.4500 swing high. The move higher from 1.4125 is acting like a classic wave C. However be wary if this turns into five waves while above the overlap point between what would be waves 1 and 3 at 1.4220. We will be in our Intraday Signal room scalping shorts today as we don’t advise holding over this weekend with what could be fundamental rhetoric and decisions that adversely affect the market during an hour where we could not modify positions or stops. The opposite of this scenario is true in that the malaise could send the pair straight down at the open on Sunday. It just isn’t worth the gamble in my opinion, but if you must have a play on keep stops just above critical levels and look to get in something early – mid U.S. session so that you may have a chance at removing most of the risk before the close at 16:00 PM EST. After getting sold most of the week the risk-on sentiment is bouncing higher with the enamored hope that the powers-that-be will rescue Greece and restore the confidence of the markets. It is the same old story for me and I believe it inevitably fails, but the situation can remain irrational far longer than I can bet against it, so be nimble and use stops.
Technical Video for 6.17.2011
Forex
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