This week the much talked about 1.4000 will be a pivotal fighting ground. If the bulls are going to lose ground here expect a sell-off into 1.3872/1.3837 daily support .
Following Portuguese PM resignation the last two trading days of the week have seen a more negative tone in the market . The country will now push towards early elections and a potential international financial bailout.
There are already rumours of an 80bln Euro bailout on the street this will shatter any confidence the market has in Portugal and a bailout now seems inevitable .
Are we in the misted of a Classic Bull trap ?
Just as The Euro broke the 1.4000 handle with conviction last week, will we now have the reserve come into effect triggering a classic ‘bull trap.’
Longer term Bulls should not get complacent although the trend is still firmly up on all time frames and momentum is with the buyers with such negative sentiment slowly creeping back into the minds of traders another EU debt crisis could rear up again and snap the recent bullish Euro trend.
Freshly Squeezed view
This week the 1.4000 will be a pivotal fighting ground. If the bulls are going to lose ground here expect a sell-off into 1.3872/1.3837 daily support – this should provide the “real” fighting ground between the bull and bears –
Remain Bullish but cautious on a larger pullback as better value areas lay below as stated of the daily support . Until those areas are met I have no interest to conduct business . However I will keep a close eye on the Portuguese and other news related themes .
Although the has market remained resilient complacency is foremost “weaker” participants trapped may start to jump out of their initial positions causing the market to subsequently resume its correct, fundamentally-driven direction, As a result thus a bigger bull trap exacerbated from Johnny come lately,s trapped in position above the 1.4000 Handle . – a EU debt crisis could rear up again & any bounces of Daily Support must be closely monitored for potential Lower highs coming into formation without which would see potential Profit quickly evaporated as the bull run comes to an end .