The UK traders pushed the EUR down and the US traders pushed it right back up.
Positive economic news numbers out of Germany and the EUR moves down. Negative unemployment numbers out of the US, and the EUR moves up…hmmm. I hope as traders that you do not trade based upon the economic news numbers themselves… but you must be aware of the economic news releases pending and how significant they may be to the market in terms of potential volatility.
After the news…regardless of the outcome, the intraday trends tend to set up. Note how price could not stay above the Asian session high. With news out of the way, the EUR started its move down. Read what price is telling you at these critical areas. Wait to be convinced of direction, and if the Reward to Risk meets your minimum criterion…evaluate the trade. In this case, we can place a stop above the spike high and have a greater than 3:1 RR to our Target 2. As price moves down and goes through the Asian session low, we anticipate that more often than not, it will want to retest this level or in today’s case, yesterday’s low as well.
Price drops further and closes at a very critical area forming a wicky candle. This bounce back up is our clue to close.
*Note in the chart the highlighted areas where price sticks around and retests. These levels are very important to institutional traders, so it’s wise to heed what price is telling us at them.
Back tomorrow if we can find a trade.
Good luck with your trading!