We bought the EURUSD just after the London Open this morning Wednesday Nov. 10th. EURUSD had a big drop yesterday during the New York session, and although a further drop is possible, it seemed more likely that some retracement was due. So far this week the USD has gained some after the good Non-Farm Payroll numbers this past Friday, also with last wednesday's FOMC out of the way, the amount of QE2 is now clear. The initial reaction to the FOMC was to sell the USD and the EURUSD nearly reached 1.4300, however the market has been anticipating this move by the Fed, and most of this QE2 was already priced in. Additionally there has been a refocusing of the markets attention back to the problems in europe, with the situation in Ireland in particular focus. The eurozone peripheral bond spreads (Greek-to-German,Irish-to-German,Portugal-to-German) have been widening, and yesterday saw the 1st drop in 3 month Euribor fixing in 31 sessions, and today we saw this drop continue.
Just before London opened there was news that the Bank of India was seen in the market buying EURUSD. Yesterday they were seen buying the Euro as it dipped from 1.3880 to 1.3825, actually coming in at 1.3850. The rally then got going after the UK Industrial Production was out of the way, and reached 1.3970 by the early New York open. So today they came in around 1.3785, but we were not going to jump in right away after them...instead the EURUSD dropped to 1.3765 and put a nice long lower wick candle 11 minutes after the open and started to move up off this...this is where we bought and targetted the handle, taking profit along the way and moving up our stop loss.
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