Looking at Our Good Friend the Euro

The last time we checked in on the Euro dollar contract was at the beginning of the month. At the time it was suggesting bullish undertones pared with a slice of healthy auction. Since then bulls have moved the price much higher, nearly five percent, to achieve a significant land grab and target destination of the composite high volume node. This price level, 1.3160, represents the price where the highest volume of transactions has occurred on data dating back to January 2010. The matter in which the price target was achieved is most impressive. A thrust, if you will, that even the V.King would appreciate.

Since then price has auctioned in a manner that suggests mild profit taking, and a healthy rotation lower to revisit some low volume pockets left behind during the aggressive mid-September pump. Taking to the daily bar chart we can see the composite volume on your right along with some annotations:

Going forward, the psychological barrier of big round 1.3000 paired with it being the range high of this very low volume pocket makes the price level my bias line. I’m have a bullish bias above, and bearish below, for the unwashed until further notice.