That was a common activity yesterday by the traders and market participants. After Bernanke’s testimony at the Congress EURUSD made significant moves and gave us clear information about which way dollar wants go.
Big Ben has opened the door to a delay in reducing the FED bond buying program. It seems that Bernanke doesn’t seem to be in a hurry to taper QE. Another fascinating development was in terms of indexes.
Despite this great news, in the interpretation of the market, the indices haven’t gained much. After a 9 day rally, S&P500 stopped a bit the bull track.
EUR/USD
In our view the EURUSD made a Bull Trap yesterday afternoon at 1.3177. It first seemed that the pair wants to go up, but that was a trap for long traders.
Shortly after that, the dollar started strengthening and came off the course of EURUSD. In our interpretation in the last one week the pair was not able to close above the 1.3200 and fully lost the upside momentum.
It tried to test it twice – please look at the red arrows – but couldn’t succeed. So the long battle has failed. So after a while for the EUR/USD bears, we are expecting a change, that seems certain today.
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