This is the morning after. The market seems to have a weekend hangover. Too much hopium perhaps? We'll see.
That was an amazing short covering. Approximately 150 pips worth of short covering, and all before the Asian, European and American markets had a chance to react.
Did anybody notice what I noticed??? No reaction from the Asian markets at all. Is it over then? Will the European and American markets jump on the hopium train, or are they so hung over from the short covering that they're just going to sit pretty and wait for the headache to clear up? The first sign of that answer will come around London opening bell. The European session has already started and price is still in a comatose state.
As I pointed out in an earlier post, the short covering found heavy resistance at 1.2667 which happens to be:
1. The H4 rising channel resistance
2. The monthly rising trend line resistance
3. The 38.2% fibo level of the move down from 1st May
So now the question remains... Will the market pop it, or will it fade it?
Some considerations:
1. Nobody knows how much the bailout will be until after the audit is completed on or about 21st May.
2. Spanish bond holders will have to take second place creditor status behind any bailout (Not good for bond markets)
3. The Greeks are going to be really pissed that Spain will not have any further conditions tied to the bailout loan and they might vote for the Syriza party as a result. The elections are this coming Sunday... before the Spanish bank audit is concluded.
4. The ratings agencies are already doing the sovereign downgrade talk... (also not good for the bond markets).
Anyway, so far we are flat. 1.2620/25 is offering some solid support. In less than 30 minutes we may find out where Europe is going to take us. So the question now is... Was this a fear of loss short covering, or is it going to be a hopium rally?
E/U H4
That was an amazing short covering. Approximately 150 pips worth of short covering, and all before the Asian, European and American markets had a chance to react.
Did anybody notice what I noticed??? No reaction from the Asian markets at all. Is it over then? Will the European and American markets jump on the hopium train, or are they so hung over from the short covering that they're just going to sit pretty and wait for the headache to clear up? The first sign of that answer will come around London opening bell. The European session has already started and price is still in a comatose state.
As I pointed out in an earlier post, the short covering found heavy resistance at 1.2667 which happens to be:
1. The H4 rising channel resistance
2. The monthly rising trend line resistance
3. The 38.2% fibo level of the move down from 1st May
So now the question remains... Will the market pop it, or will it fade it?
Some considerations:
1. Nobody knows how much the bailout will be until after the audit is completed on or about 21st May.
2. Spanish bond holders will have to take second place creditor status behind any bailout (Not good for bond markets)
3. The Greeks are going to be really pissed that Spain will not have any further conditions tied to the bailout loan and they might vote for the Syriza party as a result. The elections are this coming Sunday... before the Spanish bank audit is concluded.
4. The ratings agencies are already doing the sovereign downgrade talk... (also not good for the bond markets).
Anyway, so far we are flat. 1.2620/25 is offering some solid support. In less than 30 minutes we may find out where Europe is going to take us. So the question now is... Was this a fear of loss short covering, or is it going to be a hopium rally?
E/U H4
Those who say it cannot be done should not interrupt those who are doing it
