Did We Move Too Soon?

Markets rallied on rumours and solid earnings from Corporate America.

The euro rallied well testing the 1.3050 mark, if we break above this and hold then we could test recent highs, however, we do remain slightly concerned (hence have moved stops up tightly on the euro play from yesterday) this is really for two main reasons. Firstly we still don't have a bailout request from Spain and although the market was filled with talk of a credit line today this was more rumour than fact and although we think the Spanish bailout request will come at some point (market forced or willingly) they still don't seem to be close to doing it. Second issue is the continuing strife with Greece; rumours that the Troika talks had broken down then that they were ok sparked today but again little detail; therefore the rally seemed quite a push for little real fundamental improvements.

Other thing that caught our eye is that whilst we had a risk o theme, the Aussie and the Kiwi struggled to push higher; normally these are highly correlated risk pairs; this could be due to challenges with China and commodities but it does strike us as slightly disjointed.

It is important to play what the market gives you so good breakout trading today worked well and although we stopped on a couple of swing trades (AUD/CAD) we also booked some good profit (GBP/NZD).

EUR/USD
Signal from yesterday played out strongly; that said we are still concerned and therefore want to see a hold above the 1.3050 mark to then potentially test 1.33. To protect our position we have locked in profit and taken some profit already.

GBP/USD
A break of yesterday's high and the range has provided a small profit. We like this rally for a push higher but will trail our stops carefully.

AUD/USD
The aussie stuck to its range during a strong push higher in risk pairs today watch for breaks in either direction.

USD/JPY
USD/JPY looked to peep out of its range today (almost exciting), if we can test the 200 day moving average and take out some shorts then this pair may finally make a break for it; time to start paying more attention to the pair again.