Even though last week worked out exactly as planned, the way it happened, was not exactly technically correct. If you look at daily and weekly charts of EU or GU, it seems very bearish, BUT the price action starting on wednesday, makes me think, euro and pound bulls are not done yet. Since the move was a bit surprising on thursday and friday, without any proper corrections, I had to analyze it on the tick chart, which was time consuming, but I hope it will be worth it in the coming weeks. I will start with Gold, as mainly euro is highly correlated with it. The way gold reacted to the fed meeting was extensive. It simply overreacted! So on thursday I was watching the tick chart before and after London fix and noticed a “big long entry” at 1768…this is not exact science, so I might be wrong, but there are things I have seen in the past and they keep repeating themself. So, I saw some big boys entering longs there…and really, gold started climbing up, without breaking this barrier later in the day. Then on friday, EU and GU continued with the bearish action and mainly the US session was one-sided and took them both down…so gold went down, too…but again managed to protect the 1768 area, no matter how much dollar was gaining. The only thing that kind of messed up this number was the last hour of trading, well 62 minutes before market close or so…when gold broke that barrier and quickly went down to 1760, to slowly bounce up towards 1764 by the end of the day. The break was not big, so I do not think much of it, but still, it would have been nicer, if 1768 stayed protected. Anyway, looking at the weekly chart, gold is still bullish long term and this whole move this week only looks like a correction, rather than a trend change. And when gold goes up, it will help both EU and GU to go up, too, because friday’s US session was so one-sided, it almost didn’t make any sense. Technically, moves like this make me always suspicious…and looking at the weekly chart, it would make sense, if next week was bullish on both EU and GU…and the week after that on wednesday, is the month’s end. I expect both pairs to go up until the end of the month.
