Today has been a day of reading and working on Tradestation. I have a sore throat and hope I am not getting a cold.
Only one thing has broken out today — EUR/GBP. I am not particularly convinced by this breakout. EUR hasn’t broken out against anything else, and I suspect it’s all a reaction to this morning’s European employment numbers — which weren’t that awful — a bearish-sounding report from the ECB and good manufacturing numbers in the UK. The breakout did happen on high volume in the morning but thrust started running upward in the middle of the day. On the other hand, if the breakout is real then EUR/USD and EUR/JPY should go as well, and then this will serve as confirmation.
Actually, having written that, it seems much more likely that this is being driven by GBP, which has been rising against JPY and USD. If risk assets recover then GBP should do well; alternatively, I was getting the feeling that GBP had been over-sold (we are not in as bad a place as the Europeans). A breakout is not likely against the USD or JPY, so trading this break against the EUR might be a good opportunity. Also, the breakout level, around 0.84, was a long-term support level.
I am coming round to the idea of trading.