Forex Price Action Setups (Spain, Greece & the Horror with No End) May 28th

Spain, Greece and the Horror with No End…For Now
Although markets were calm today from the US Memorial Holiday, Spain today asked the EU to act in providing support for fiscally frail gov’ts (read ‘Spain is begging for help’) as its fiscal gaps and banking system (but, but…Bankia is fully solvent you said) are getting pummeled with soaring yields which are punishing the rates on bonds.  Again, Spain is 4x larger than Greece so if Spain goes, you have just seen the titanic hit the iceberg.

Meanwhile further in the Mediterranean, Greece seems to be playing chicken with Germany on wanting bailouts, but not meeting the conditions.  Both parties are discussing the bailout but one is pro-bailout and the other is anti-bailout.  This uncertainty has left investors not wanting to risk it by holding Euros and waiting to see how it plays out but this is beginning to be like a horror movie with no end.

Ultimately, this has benefited precious metals and the USD which we anticipate will continue to stay strong until the Greek elections on June 17th but if you hear about continuing bank runs in Spain and Greece, the pressure will only mount on the Euro which is already holding a record number of IMM shorts.

USDCHF – Knocking on Multi-Year Resistance
As we talked about last week in our forex price action setups commentary, the USDCHF was approaching key multi-year highs at .9600 which has not seen a daily close above it since early 2011.  The key note about this level was the last two times it visited there, it formed a large bearish engulfing bar each time.

But this time, price has formed two inverted pin bars and is hanging just below the key level.  Either this is because the EURUSD has a record number of shorts and is having a hard time finding new shorts to break lower (thus keeping this in check), or this is the calm before the storm and an upside break is on the cards.  We are watching price action setups here for either a failure on the daily or 4hr charts, or a breakout retest setup with a daily close above this level.

forex price action pin bars may 28th

For those wanting to learn rule based price action systems, access to the traders forum, lifetime membership & more, check out my Forex Price Action Course.

Upcoming Economic Announcements: 

AUD HIA New Home Sales (MoM) 01.00GMT 21.00EST
EUR German Consumer Price Index – EU Harmonised (YoY) 12.00GMT 08.00EST
USD Consumer Confidence 14.00GMT 10.00EST

Make sure to check out my new forex trading article Trading Rule #1 – Know Thyself

Want More? My private members get all my trade ideas & market commentary up to 3x per week. Click here to become a member.

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.

Related Article

  • Gabriel M

    Nice article but I have a question about the IMM shorts… Is this futures information on the euro or something else. I was unaware that “short interest” info was available on currencies. Thanks Chris.

    • Hello Gabriel< Yep, the futures contracts on the Euro. Definitely interesting to say the least. Kind Regards, Chris