Forex Price Action Setups – Greek Uncertainty Weighs Heavy on Euro May 16th

Greek Uncertainty Weighs Heavy on Euro & Markets
Where to start…well, how about the fact it was reported an additional €500m fled the Greek banks (total of €1.2B in two days) as everyone who has two legs and can push keys in the ATM machine is withdrawing money like they will never see it again.

This has only increased the risk of an all-out banking collapse in Greece which would mean minimally more panic and likely a default on their loans since the banks cannot pay any of the loans back.

Adding fuel to the fire was Draghi who said the ECB will stop funding operations for some Greek Banks (read veiled threat and no funding support if you do not participate in our austerity program).  He continued that he had a strong preference if Greece stays in the EZ, but they will not compromise on its principles to prevent an exit.

You can translate this as Draghi saying you have the green light to leave if you cannot meet our terms which is highly doubtful they can.

This did not help markets at all and we immediately saw the EURUSD dump 30pips in a matter of minutes.

But what happened next has been supporting our recent theory which we wrote yesterday in our forex price action commentary, that the EURUSD and other majors are forming a short term bottoming structure which is showing up on the intraday charts of 1hr and under.   We’ll talk about this further in the next section but the Euro, Aussie, Kiwi and cable are all holding the line which is a first for them in some time.

As for the global markets, the DOW lost 35pts or .26%, Oil dropped to just under $93 a barrel and the other big loser lately – Gold hit its lowest price since Dec. last year.

EURUSD – Showing Short Term Bottoming Formation
Although we do not think this will last long as any more bad news out of Greece, Italy, Spain or anything in Europe will send this pair back down, we are seeing across the board how all the majors are showing signs of bottoming in the near term.  After the exhaustion price action selling we talked about yesterday, price has formed a bullish pin bar off the intraday lows, then traded sideways with 4 of the last 5 4hr bars closing bullish suggesting a strong tug of war going on down here.

We suspect the market is going to bounce a little before sellers come back in on any rallies, perhaps the dynamic resistance and the 20ema. We will look to sell at the dynamic resistance above, along with the 1.2812 level and look for price action triggers here.

forex price action trading exhaustion reversal bars 2ndskiesforex.com may 16th

Take a look at how the AUDUSD and NZDUSD are showing similar attempts to bottom on the 1hr charts

AUDUSD Forms Pin Bar Rejection Off Lows

forex pin bar strategy price action forex trading 2ndskiesforex.com may 16th

Same with the NZDUSD Forming A Bullish Pin Bar Setup

pin bar setup forex price action trading 2ndskiesforex.com may 16th

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Buddhist, Trader and Philanthropist

I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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