Article originally published on innerfx.com and republished here with permission
Envy can be a positive motivator. Let it inspire you to work harder for what you want. ~ Robert Bringle
Good morning. Sentiment remains unchanged across the board, euro and other risk pairs extending Friday’s sell-off.
Recent top comes under pressure as the dollar extends gains in risk-off trade following Friday’s EU Summit. The rally corresponds to EURUSD’s retest of the bottom zone around 1.3150 (see EURUSD chart below)
The ugly turned uglier as the bottom around 1.3150 is under pressure. As mentioned yesterday – I’m expecting more downside, testing round support at 1.300 soon
Zooming in the 1-h chart, we can consider the median retracement value of last down leg (from Friday’s top to current low) a decent point to sell into strength.
Here’s what you can call an easy trade: just follow the
rumors flow and don’t bet against the house. As much as I don’t like to quote myself, I do it because I know some people really love to trade against the wind:
Rumors of interventions continue to kick the CHF every time it gains ground – retesting recent bottoms against the EUR, GBP etc. Trading against a central bank’s plan is not the best idea. The house always wins. So, buying on the break of 1.44 looks like a good plan these days – December 2
No change of plan here, as the Swiss franc is getting hammered by circulating rumors of SNB’s interventions on a regular basis. Holding long with decent stops or buying on the break above 1.4380/00 are the only two bets I can think of. – December 5
So, selling at the “very top” while everyone and his dog was waiting for new SNB intervention, rumors, [insert here whatever events to weaken the CHF] was a foolish idea. Same as buying USDJPY every single day while it’s been falling for months
Support at 100 is likely the next objective as support formed by the rising trendline which is connecting recent higher lows was breached. Interim horizontal support formed by November’s bottom is currently being tested.
One of the plans highlighted yesterday, which is to sell on the break below 78, seems quite reasonable which price continues to push on support at 78.