AFTER THE BEGINNING OF AN EXHAUSTION OF DEMAND DUE TO THE ANNOUNCEMENT OF THE FEDS INITIATING ITS BOND BUYING PROGRAM, EURUSD COMMENCED ITS SOUTHWARD MOVEMENT WHICH TRIGGERED A REVERSAL OF THE ONGOING RALLY..

 

BUT ON DEC 27 2013 EUROPEAN CENTRAL BANK GOVERNING COUNCIL MEMBER JENS WEIDMANN STATED IN A SPEECH ON GERMAN’S NEWSPAPER THAT KEEPING INTEREST RATES LOW MAY ENDANGER A POLITICAL REFORM…HE SUGGESTED THAT INTEREST RATES SHOULD BE RAISED AGAIN IF INFLATION PRESSURES CONTINUE TO BUILD..

 

THIS DROVE INVESTORS BIZARRE AS THIS FUELED THE DEMAND FOR THE EURUSD…THE PAIR WAS ABLE TO BREAK RESISTANCE 1.3831 THE HIGHEST IT MADE SINCE JANUARY 2013 TO MAKE A NEW HIGH AT 1.3891..HOWEVER IT CLOSED LOWER FORMING A REJECTION PATTERN AND ALSO CLOSING INSIDE THE ZONE

 

HOWEVER RESULTS OF PREVIOUS WEEK TRADING SESSION INDICATED THAT PRICE COULDNT BREAK 1.38161 RESISTANCE, A RESISTANCE WHICH HAPPENED TO BE THE CLOSE OF A 4HOURS CANDLESTICK ON DEC 27 2013 AFTER A REJECTION PATTERN WAS FORMED BY IT..THE PAIR THEN COMMENCED ITS BEARISH RUN AND WAS ABLE TO BREAK AND CLOSE BELOW THE SUPPORT 1.36240…THE LOW IT ORIGINALLY TRENDED TO AND MADE AFTER THE FEDS ANOUNCEMENT

 

FURTHER SOUTHWARD MOVEMENT IS EXPECTED THIS WEEK WHICH WAS FUELED BY BERNANKE’S SPEECH ON LATE FRIDAY US SESSION BEFORE MARKETS CLOSED, HE STATED THAT USD’S ECONOMY IS IN RECOVERY THOUGH NOT ABSOLUTELY AS HE WAS CAUTIOUS..

 

HOWEVER I AM EXPECTING A RETRACEMENT ON THE EURUSD TO GIVE A 2ND WAVE (ELLIOT WAVE ANALYSIS) BEFORE COMMENCING ANOTHER FALL..

TRADING RECCOMMENDATION:

SIGNAL WOULD BE POSTED AT MARKET OPEN

 

 

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