EURUSD 12-8-06

12-8-06

EURUSD

There was no trade in the EURUSD yesterday. The EURUSD never reached the 1.3334 supply area before selling back down to the bottom of the range, so the pullback trade at 1.3215 was negated. The area of supply at 1.3324 made the pullback trade a less than 2 to 1 risk to reward entry which is why I wanted to see the EURUSD trade up to 1.3334 before I would buy a pullback to 1.3315.

Today is the NFP report which has the potential to cause wild swings, and will probably cause both a spike higher into the areas of supply at 1.3314, 1.3324, 1.3334 and 1.3360 and possibly a spike lower to the area of demand at 1.3247. None of the areas of supply are fresh. The area of demand at 1.3247 is fresh, and I would be interested in a possible long trade if the EURUSD spikes down to that 1.3247 area and then reverses higher. Watch for a spike candle that closes off the low and above 1.3247 before your long entry and set a stop just below the low of that spike candle. Keep trailing your stop as each level of supply is approached. The next area of supply to worry about is 1.3385 which is not very far above the 1.3360 area. Tighten your stop loss up to avoid a whipsaw once that 1.3385 level is visited. A drop below 1.3360 would be where I close the long trade.