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Blogs about basic information in forex trading, forex participants and how to earn big in forex trading.It doesn’t really make sense to look at anything other than the Euro today as it is the Euro debt crisis that continues to drive sentiment in the markets.  This creates the “risk environment” where the market decides if they want to take it or avoid it.   Then


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It doesn’t really make sense to look at anything other than the Euro today as it is the Euro debt crisis that continues to drive sentiment in the markets.  This creates the “risk environment” where the market decides if they want to take it or avoid it.   Then the correlative properties of the currencies take over and we esentially have two trades in the market. 

To start the week, risk appetite has picked up after last week’s selling but today we are at “crossroads”.  The market has been anticipating some good news from the Euro zone regarding the Greek debt deal and the overall debt crisis and the potential resolution to it.  And so far, we have seen little to believe that we are any closer than we were last week.

Yet the markets are willing to give the benefit of the doubt when it’s early in the week, but become more fearful as we near the weekend when markets are closed and nothing has been accomplished.  This has been par for the course for EU leaders and frankly has been what has been weighing heavily on global markets.

Looking at the 1-hour chart of EUR/USD, we can see a familiar pattern emerging– early week risk appetite followed by end of the week risk aversion.  Last week I called a move lower in this pair which hasn’t happened–yet.

But should there be no resolution or a negative outcome, then that selling could resume rather quickly.  Earlier this morning, EUR/USD bumped up against its R1 daily pivot resistance and could have problems advancing further.  Alos note that our fast-setting stochastic is showing a bit of an over-bought condition which could foreshadow some further selling.

A new range is being established, so perhaps a return to 1.34 by the end of the week may occur.

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