The quarter officially closes today at 5:00 PM ET and then we roll right into the start of Q2 tonight. I hardly traded today because the flows were highly irregular as traders needed to transact business to square up their financial books. A lot of the moves today seemed to be irrespective of the underlying market rhythms, so I did not feel that I had an edge. Remember, your job as a trader is to not learn how to trade every market. Rather, your job is to identify the markets in which you excel, search them out, and then destroy them.

I have been tracking EUR/GBP in 5 waves up to the massive 0.8000 resistance mark for a few weeks now. We printed a 0.7982 high today and have since backed off about 30 points to current levels of 0.7952. Recent inflation and confidence data out of the Euro Zone is about bullish as it's been in recent memories, while the Sterling data is growing increasingly poor. Why then go short EUR/GBP in this situation? Because significant price reversals often occur after five clean waves up in a fundamentally strong environment. Market prices lead fundamentals because financial markets are forward-looking by discounting future events. I am offered at 0.7980 and 0.7990 with stops just above 0.8010. Take profit remains open for now.



Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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