What’s Up? Not The Euro! Forecast And Video Inside!

By Christopher Diodato – TradersBase.com

I’m doing a complete cop out.  I do not want to be lured into making an estimate of the report tomorrow, which will undoubtedly move the market!  The most I will say is what I already said in my post yesterday after the close.  So, instead I’ll blab about the Euro!  Did anybody notice yesterday morning, with all the “good news” of monetary stimulus from Europe and China that borrowing costs surged for both Spain and Italy?  Spanish bonds yields rose 37 basis points while Italian yields rose 21 basis points.  While that happened, the Euro dropped nearly two percent.  That is a huge daily move for a currency (the average move for the EUR/USD is 11/1000 of a cent per day).  So what is in store for the currency in the future?

With classical methods, it looks like it’s getting very close to breaking below the lower part of a bearish double top, or a Frankenstein descending triangle.  Either or, with that breakout, we have a minimum…ABSOLUTE MINIMUM price objective of $1.1177 in the currency pair.  I would not be surprised if this level was violated too, since as the Euro continues to weaken, the dollar is looking to break out to the upside very soon!

Here’s the video with the analysis.

If you wanted to trade this, you could short futures on a breakdown below 1.225 with a tight stop, and then pyramid once the second low is broken.

Happy trading!

~Christopher Diodato

Christopher Diodato

About Christopher Diodato

I have been trading since my eighteenth birthday to pay for my college tuition. It was at first rocky, but now trading is my love, my work, and my passion. In addition to my experience in markets, I have passed all three exams to obtain the Chartered Market Technician (CMT) credential. I believe that I am the youngest to ever do so! I want to help out small investors to make some money on the side. There's a common notion out there that "big money" rules all. I disagree. With enough hard work and discipline, anyone can become the next Paul Tudor Jones!