2014 Volatility

EUR/USD Daily Analysis: Well, we were hoping doing an intraday update today would yield a few higher probability setups but it wasn’t meant to be: exchange rates continue whipping around in an almost random fashion, making it difficult to place a stop-loss with confidence in the short-term. Looking at the bigger picture, however, we find that the pair is pressing against the underside of long-term, monthly falling resistance (blue line on our long-term chart below) which could very easily help create the downward pressure we expect to start 2014. Obviously we’ve seen a lot of volatility in the past few days (Friday and this morning) but it is very hard to read into that too much as relatively small position changes by banks can influence the exchange rate in these thin holiday markets.
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Our Preferred Trades*: If we were in the markets today than we would be looking for reasons to get long. EU has been in a long-term uptrend for weeks now, and the psychologically important 1.40 is still pulling at price from above. Our preference would be to get long on dips with candlestick confirmation, with 1.3730 the nearest support. As a reminder we are not trading today due the thin holiday, end-of-year volume and the volatility that it can cause.

Yesterday’s EUR/USD SwingPRO Signal Result: No SwingPRO trades taken Friday to report on.
Today’s SwingPRO Signal: We will stay flat through the New Year!

*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and “our preferred trades.” For example, if we prefer “going short” or “selling a rally” then we would look for bearish candlestick signals after a rally or near resistance levels. Alternative if we prefer “going long” or “buying a dip” then we would look for bullish candlestick signals on price drops or near support levels.

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