Dollar Strengthening On Bin Laden Death

Quote of the day: “Fighting terrorism is like being a goalkeeper. You can make a hundred brilliant saves but the only shot that people remember is the one that gets past you.” – Paul Wilkinson

EURUSD – 1.4793 @07:32 GMT

Good morning. The big news today is that bin Laden had been killed in Abbottabad, Pakistan by American military. The US dollar strengthened on the news as commodities declined from recent highs and the euro also retreated, extending Friday’s pullback started at 1.4875. My Friday plan to take a small position on the potential break above has failed, as the pair couldn’t sustain gains. However, I remain bullish on EURUSD even if a potential correction will bring support into the 1.4520-1.4650 region in focus. 4-hrs charts are still bullish at time of writing but would turn negative on the potential decline below support at 1.4770, opening the door to 1.4630/50 as possible bearish target. ECB’s Trichet Speech is today’s most important event in the FX Calendar at 10:00 GMT, followed by the US ISM Manufacturing Index at 15:00.

Trading strategy: looking to buy on potential pullback to 1.4685, stop at 1.4625 (0.5% risk), target open

Support: 1.4770/00, 1.4730/50, 1.4700 and 1.4600/30
Resistance: 1.4850, 1.4880/00, 1.4950 and 1.500
Market sentiment: long term – mixed, medium term – bullish, short term – bullish, intraday – bearish

EURUSD 4hrs chart 5-2-2011
EURUSD 4hrs chart 5-2-2011
EURUSD hourly chart 5-2-2011
EURUSD hourly chart 5-2-2011

About abwehra group

The Art&Science of Trading Gold
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