Trade Idea: 2012-7-26 01:20
Truth be told, I’d like to sell right at market. But with Stochastic showing that conditions aren’t overbought yet, I’ve decided to wait for the pair to trade a little bit higher. I’m going to sell at around 1.2160, which is the area between the 38.2% and 50.0% Fibonacci retracement levels.
Fundamentally, there hasn’t been any real positive development in Europe. Pip Diddy reported that the euro rallied from its lows yesterday following ECB Member Nowotny’s remarks about the advantages of giving the ESM a banking license. However, the fact is, Germany hasn’t even approved the rescue fund yet!
On top of that, Spanish bond yields are still at unsustainable levels. Although borrowing costs for 10-year bonds retreated from their euro-era highs of 7.62%, they are still above the crucial 7% mark, the level which forced Greece, Ireland, and Portugal to ask for bailouts.
Here’s what I plan to do: