Follow Up Post

Friday, I posted this article on the Euro/ US dollar. It looks like for now, the consequence I was looking for has come through today, but before I'd go knee deep in correlated positions, the Ireland vote tomorrow could influence the outcome.

However, this is a good lesson for trying to time pullback entries. As you'll see in the post, the first pullback of a move tend to be to the 10-day moving average, the second around the 22 day moving average. As the trend progresses, typically the pullbacks get a little deeper. If today's reversal holds, we should see a new low in FXE, a new high in the dollar and the next pullback should be solidly to the 22 day moving average.