Trade update

Gotta admit I don't have a very strong handle on the market at the moment. The core short EURUSD position I'm running has been met with very significant headwind over the past 2 weeks. As I understand it, EURUSD has been dominated by cross flows particularly from major yen selling, and bearish news that would normally drive the pair 30, 40, 70 pips have had very little, if any, effect.

When a pair is not acting in an expected manner (i.e. trade lower on a combination of news & data that is clearly EURUSD bearish) despite having the kitchen sink being thrown at it, then this is a clear warning that its very likely to head the other way. My suspicions were later confirmed when the market took EURUSD up to the 3200 handle on Tuesday night.

Admittedly, this was a moment that was starting to get me hot under the collar. From a technical perspective this is where the weekly kijun resides along with a number of confluence factors. Unable to convincingly crack it, the pair reversed in early Europe yesterday, and was given a second wind triggered by ECB's Weidmann who signalled ECB preparedness to adjust interest rates further.

Now, I don't think there is much to be read from the reversal at 3200 (apart from being an attractive place for long term shorts) or that there are any significant long-term implications from Weidmann's comments. What has happened is that a whole bunch of short-term bears have been cleared out by the rush up to 3200, and now bullish breakout traders will be under the pump given that EURUSD currently trades 3050. From an orderflow perspective the bullish stops underneath the range will be getting huge, and now that we are not that far off from them, they are the obvious next target.

Position wise, my average EURUSD entry sits around the 3100 handle. I'm also trapped in a light gold position at $1480 and will forget about it because it looks like staying this way for a very long time.

And so, to another day of trading...

EDIT: I've let go of the short at breakeven during the Friday night session. This trade has had 2 weeks to breath and the most its done is around 70 pips. Think I have to wait for better levels, and when sentiment really turns...  Maybe better to look elsewhere for the time being.