Before currencies opened for trading, news broke out that European Union leadership finally managed to get their wits together and agreed on assistance to Greece. Finance ministers crafted a resolution providing Athens with 30 billion Euros in 2010, if necessary. Money would come as a three year loan at %5, seen as “favorable” terms. At the same time, International Monetary Fund pledged additional 15 billion Euros, should the need arise. Officially, Greek government needs a little over 30 billion Euros before the end of this year in order to cover maturing debt, interest and this year’s budget deficit. It seems there will be no default, at least this year. But one must remember, that eventually Greece will have to repay this debt, too. In other words, problems are not truly solved, just postponed until better times. Hopefully.

Evidently Forex participants liked the news, because Euro continued its bullish run. Currency opened strongly with large gaps across the board. After that most EUR crosses continued higher for few more hours, including EUR-USD. That was the situation I was looking for, for a short trade, as described yesterday in Important week post. Plan was to sell on a price run up, few hours after the open. It didn’t work out exactly as anticipated, but close enough.

Entry was less than perfect, the reversal was not very well defined, but I took my chances. trade was almost stopped out on the next run up, but eventually price turned and slowly drifted lower. I closed few minutes before US session opened. Didn’t know if some news would effect it. Gain was decent and I didn’t want to lose it, so that was it. Transaction brought 73 pips.

Another Euro pair discussed yesterday was EUR-AUD. I wanted to go long there, targeting 1.4600-10. Unfortunately, the gap was just too large, I normally don’t chase the price. Was hoping for the gap to fill, but that also didn’t happen. No trade, at least for now. Example of correct analysis, good market prediction but no trade. Happens, nothing to shed tears over. Still, Aussie weakness was welcome, because of my other trades against it.

On Friday I passed on trade in AUD-JPY, because the conditions sought didn’t happen until late in the day. Last night, once Aussie-Yen started to drift lower, I gave it another shot. For the entry, minor low of 86.65 was used, with order at 86.63. Objective was set to 86.00, which was met not long ago. Next support is at 85.70. I expect to see a bounce of some sort there. If this materializes, next short position will be open on following move down, under that. I will also consider selling it on any run up above 86.50, but then will have to see very convincing bearish candle on this, 4H chart. The remaining potential trade from last post, GBP-CAD, didn’t happen. Price came within 1 or 2 pips of my entry on this platform, but no fill. I will resume this topic in next update.

Mike K.