After a rally that brought the pair from 1.2660 area to 1.3300 the bull had some asitation and after 2 weeks trading in a narrow range the pair retest the 1.3300 level and than print a candle wich indicate a clear trend reversal: new high and bear candle, this was followed by a 200 pips bear candle and a new trend reversal...actually the last candle happened in a really low liquidity environment.
From here shall we play bearish or bullish?
We can see that the pair closed its day really close to 38% retracement of last bull move. We can say that the pair broke that support, but when we see it regain it, we should still remember that it happened in really low liquidity trading.
Below the commitment of trader shows the position divided into players groups:
: Open : Non-Commercial : Commercial : Total :
: Interest : Long : Short : Spreading: Long : Short : Long : Short : Long : Short
-------------------------------------------------------------------------------------------------------------------
: : (CONTRACTS OF EUR 125,000) :
: : :
All : 207,608: 81,932 76,806 2,969 71,891 82,481 156,792 162,256: 50,816 45,352
Old : 207,608: 81,932 76,806 2,969 71,891 82,481 156,792 162,256: 50,816 45,352
Other: 0: 0 0 0 0 0 0 0: 0 0
: : :
: : Changes in Commitments from: December 24, 2012 :
: 5,017: 6,860 -815 118 -193 6,327 6,785 5,630: -1,768 -613
The report above shows that there is no direction for this pair;
On the foundamental side we have the FED wich may end this year the easing measure and this may be followed by interest rate raising.
from above I can conlcude that the pair may bounce from here and retest the 1.3300 area but in the medium long term should be bearish.
It may be good to short the trade if the pair goes again around 1.3000 area or would be best to waith if it regain bull momentum and short it around 1.3300 or on each sign of trend reversal.
Good luck.
