The EUR/USD closed barely lower on the day WITH making a high high than the previous price bar and without making a lower low. The pair left about a 70 pip tail wick which is pretty long.
Friday’s price action showed that neither the bears or the bulls have control. Going into next week the possibility exits that Spain will make a formal request for a bailout and this is leaving markets unsure going into the weekend. Nevertheless, a good day for scalpers and day traders with plenty of opportunity.
This is not an easy setup to trade. Position traders may want to stand aside and wait for a break today’s high or the low from yesterday. A break upwards could lead to new highs above the QE3 spike and even to a test of the super heavy resistance around 1.35 if the market reacts favorably to a Spanish bailout. A break lower should take us to the support at 1.2750.
Let’s take a look at the charts.