Euro Chop 6-2-10

Noticed selling on the way DOWN not on the way up, and strong selling in spot under 1.22, right off the small retrace from the breakdown to new LOD, essentially a choppy shakeout of overnight longs. All this while AUD/JPY and NZD/JPY (my most risk sensitive indicators in FX) were bouncing sharply.

Update: before the VWAP breakout I assumed the choppy structure was a shakeout of longs and later it was the right call. Heavy selling into 1.2190s before & after LOD shakeout and heavier buying into 1.2180s did lower my confidence into that assumption:

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I also held a very small BP long position overnight. Rationale was that sentiment was extremely negative after a -15% knockout punch. I also wanted to pay more attention to the whole oil spill charade and the best way to do that is to be long oil rigs at the center of this deliberate terror attack (notice GS date of sale) like BP. Overnight risk is just way too big for me. Its far better to scalp them than holding O/N. Got out +$.80 in early morning before open.