The Euro gapped downward this morning after strong “forward guidance” by Draghi (ECB) that if the Euro strengthened much more then central bank intervention may be needed. The threat alone was enough to scare the pair downward but we don’t think it will be enough to sustain a break below 1.3780 or to stop the bull rush toward 1.40. Below 1.3780 is 1.3760, the 61.8% retracement of the 1.3670-1.39 rise.
Ultimately we believe the the weekly strength divergence will win and we will see a major correction of EU down to the lower 1.30s, but there is no reason to call that top yet – we will wait until there is more bearish evidence before looking down.
Our Preferred Trades*: Long on a bullish signal (candlestick or resistance break) near 1.3780 with a TP of 80 and a SL of 50.
Yesterday’s EUR/USD SwingPRO Signal Result: No setups triggered yesterday.
Today’s SwingPRO Signal: Long on a resistance break under 1.3800, with a TP of 80 and a SL of 50.
*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and “our preferred trades.” For example, if we prefer “going short” or “selling a rally” then we would look for bearish candlestick signals after a rally or near resistance levels. Alternative if we prefer “going long” or “buying a dip” then we would look for bullish candlestick signals on price drops or near support levels.
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