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Forex Price Action Setups (NY Close) May 8th
Greek Political Uncertainty Shakes Global Markets
The Euro and other markets took one on the chin today with the Greek elections bringing uncertainty whether they will hold to the austerity plan or bail on it and their future debt-slavement.
The key was the statement from the Greek Left Coalition leadery saying the country which started western civilization was about the pull the plug on it as the deal with the EU and IMF was null and void.
This sent markets diving with Gold, Silver and the EURUSD getting hammered within seconds. Gold lost over $30 within a matter of hours while the EURUSD dropped about 45pips in less than an hour. Overall, this should put continual pressure on the EURUSD which has sold off now for 7 days straight.
We advocate selling on any short-covering rallies up to 1.3130 for an eventual move towards the 2012 lows around 1.2650. We will also keep our eyes out for a breakout pullback setup on the next daily close below 1.3000 which has not happened since late Jan. this year.
Silver – Holds Trendline But Bearish Pressure Remains
Failing to bounce solidly from any reversal signal and hold onto gains, the shiny metal has come under increasing pressure as of late suffering along with gold today giving up a major support level closing below $30. The metal did bounce off a trendline in play since mid-feb. this year but until it can break and hold above the daily 20ema and dynamic resistance, we will look to sell rallies as we do not see any buyers willing to come in till minimally $28.55.
Below here, we can see the precious metal possibly returning to the 2011 lows at $26.05 before buyers feel enthusiastic about scooping up silver on the cheap. Until then, we will wait for price action triggers to sell on rallies or until we see a major change in the price action structure medium term. It should be noted since the yearly highs at $37, silver has sold off 30 of the last 50 days or 60% of all the trading days since the end of Feb. till today.
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