EUR/USD
May 18th, 2012Warning: This is not a recommendation to buy, sell or hold any financial instrument.
Update: Spot Gold Prints Weekly Bullish Hammer
Markets have closed for the week and the scenario I laid out below appears to be underway. On the spot gold weekly interval, we see a bullish hammer with a lower shadow nearly touching a previous pivot level. If this isn’t a short term bullish signal, I don’t know what is. This one has worked for me more often than not, which is about the best that I can say about any setup derived from using a Magic 8 Ball anointed with snake oil.
Spot Gold, Weekly Interval
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Update: Spot Gold Trying to Form Bullish Hammer (Weekly Candle)
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We could see a ridiculous short squeeze on EUR/USD soon (maybe within a week). There is a lot of overlapping woowoo that supports the pair between 1.26 and 1.25. There are multiple horizontal supports from past pivots in that range, as well as the 78.6% fib retracement at 1.2532 (on the monthly interval from the low in 2010 to the high in 2011). If it manages to break below 1.26, you could see people on CNBC and the like foaming at the mouth about Apocalypse Now – European Edition, but their traders will probably be loading up for a longside ramp job on the people who believed what they saw on TV.
Additionally, a potential double top is just overhead on the U.S. Dollar Index at 81.784.
US$ gold bargain hunters may have to wait to try for the lower levels I mentioned here. I think that thing has been frontrunning a euro short squeeze over the last 24 hours.
