Market: Eurex EURO STOXX 50 Index Futures, $FESX_F
Trading Levels: 2575/2550/2530
The future cheered to Obama’s victory but the day ahead could be highly volatile. The 30/35 range worked as a short term resistance in previous sessions. Due to our short bias, we were able to fade any attempt to break through, profiting using our money management rules adapting to different volatility regime.
Today we need to study the market’s reaction near the 2550 mark because a breakout could send the future to test the 2575 level, which we have used as a “signal” line. Whereas if the 50 mark is able to hold the buying pressure, the future could retest the old resistance, now support at 2530.
At this point it is important to point our the role of the Eur/$.
Once 1.2820$ mark has been cleared out the pair rose pointing toward the 1.29$, the move was followed by a sharp rise in equity futures , therefore keep an eye on the common currency behaviour before loading your gun.
As you can see the use of cross assets analysis is pivotal in determining your trade side, your risk and your profit target.