but fails to hold by the end of the day, again is key.
There is a lot of event risk going forward, but I only expect them to win time for the governments not to bring solutions, so my forecast maybe too quick, they can drag this drop out to two-three months. Do not forget a key date is November 6, 2012 the US presidential elections. I expect some window dressing before that, so mid September-October I would be cautious to hold onto shorts, but until than I do not think the FED would rush into announce . Im watching Gold and USD/JPY to see how market expectations are formed towards .
The gray dotted lines are weekly key levels, and the market is likely to respond at those support levels with a bounce specially if hopium is there to support it with all these talking head meetings.
Im watching EUR if we reach 1.3 there at all on all these props. Looking at last year's meetings I do not expect any long term solution just kicking the can down the street to win time. Macro numbers are not good, the only thing holding up this market is central banks pouring money into the system through monetary easing ie. printing money. Once ECB starts to print money this market will rock up, but there is a lot of politics preventing this to happen. EU is not as patriotic as the US, there is a lot of different national interest to be aligned at this stage Germany is in control.
For Germany to have a weak EUR for their exports does not require monetary easing, they just have to keep the crisis rolling, money will flow into their banks and exports go well.
I watch all these events as key turning points and not directional, there will be a lot of news and noise in the coming weeks and months. I expect there will be a lot of , bounces, up swings and fake outs to the upside but the generic trend will remain downwards. (Renko charting is a good way to filter this unfortunately Tradingview does not offer it yet Please go and vote https://getsatisfaction.com/tradingview/topics/great_job_more_price_variations for implementation) So having said all the above I watch how price reacts to the news not the news itself and
see if the market remains on track with my technical plan.
Medium term 126 is a KEY area! If we break this long term upside channel panic selling is likely to occur.