The trend on the daily trend of the EUR/USD is down, so now we take a look to see if the EUR/USD can rally if the market opens higher than the pivot point. This activity from Monday, February 1st offers a good example of that.
The EUR/USD opened above the Pivot Point level of 1.3860 and after testing the pivot point on a couple of occasions, rallied up strongly off of that support. Traders who use this tool typically adopt a bearish bias if the market opens below the pivot point and a bullish bias if the market opens above the pivot point and while I admit that two examples is an extremely small sampling, this approach has been around for a long time and is worth looking into if you are inclined to be a day trader.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.