Thursday, 12 September 2013

E$ supported by the crosses...

Reference "Awaiting for stronger signals....", 10 Sep, E$ rebounded after low of 1.32295 and high so far 1.3325, pausing after it achieved the 61.8% fibo correction. This has completed the next wave I anticipated. Important to note too is the emergence of the bearish divergent signal (see chart) but still premature to confirm. Though E$ has closed above the DMA21 at 1.3289, I am still refraining from getting too bullish. Additional support comes from the rebound in the EURxxx (sent tweet out yesterday to warn against getting too bearish EURxxx for now).

Europe order book:
Stop loss: 1.3330
Limit: 1.3230/20 and 1.3325
Order book looks very boring and therefore I do not expect anything exciting out of E$

Primary trend: Bullish
Intermediate trend: Bearish for 1.3000 (invalidated if 1.3452 breached)
Minor trend: Consolidation with slight upside bias

Technically, E$ is slowly nudging the intraday indicators into o/b zone, though not extreme yet. Intraday momentum continues to point higher. Combining other technical signals, I prefer to trade on the short side when nearer 1.3350/60. However, one would have to observe for fading intraday momentum. Expected range 1.3280/90 (1.3250 extended) to 1.3350/60.

E$ 2hourly chart - Bearish divergence around 61.8%

Tuesday, 10 September 2013

Awaiting for stronger signals....

Market reacted according to Scenario 1 (ECB dictates first...., 5 Sep13) with a low of 1.3104 before the rebound to high of 1.3281 so far. This has completed the wave I expected and anything from here could be a grind and with lesser certainty until the next lead.

CFTC COT report: Speculator's accounts as of 3 Sep 13
EUR    +40,081 vs  +22,738
JPY      -78,353 vs   -79,761
AUD   -71,117  vs   -71,501

Europe order book:
Stop loss: 1.3215, 1.3225, 1.3295 and 1.3310/20
Limit: 1.3100 and 1.3150/60

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Mildly bullish

Technically, shorter intraday indicator is slipping into o/s but longer ones are still in o/b zone. Shorter intraday momentum is suggesting consolidation but longer ones are still pointing higher. Expect E$ to test the 1.3200/20 area before rebounding for 1.3300/20 again. Thereafter, I will step aside and watch to sell if it gets to 1.3350/70.

E$ 2hourly chart - 50% fibo achieved, watching 61.8%.... 

Thursday, 5 September 2013

ECB dictates first...

Technical readings have flipped and probability for higher E$ has increased. Obviously the nearer event risk has to be ECB's rate announcement and the ensuing press conference at 1945 and 2030hrs (Sin/HK) respectively. Market at this moment has factored in no action from ECB.

Possible reactions:
Scenario A: ECB cuts rate by 25bps or bearish outlook - retest of 1.3138 but 1.3100/10 should hold for a rebound for 1.3270/3300.
Scenario B: ECB cuts rate by 50bps - sharp sell-off but 1.3040/50 to hold for rebound
Scenario C: ECB left rate unchanged - 1.3160/70 to hold for rebound for 1.3270/3300

NY order book:
Stop loss: 1.3145-30, 1.3250/60 and 1.3310/20
Limit: 1.3220/25

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Mildly bullish

Technically, shorter intraday indicators are unwinding its o/b condition. Intraday momentum suggest consolidation between 1.3170/80 to 1.3200/20. Suggest risk below 1.3090 for take profit at 1.3250/60 and 1.3290/310.
E$ 2hourly chart - 

Tuesday, 3 September 2013

Awaiting signals....

Follow through sell pressure from the weak close last week should see E$ continue to probe the downside but one cannot get overly bearish when nearer the support band 1.3100-30. Upside handle 1.3230, if cleared, should open up for 1.3300.

These are the rest of economic data for the day (timing in Sin/HK):
2100   US Final Manufacturing PMI
2200   US ISM Manufacturing PMI
Of course, the market's main focus is the US employment numbers this Friday.

CFTC COT report: Speculator's accounts as of 27 Aug 13
EUR   +36,746 vs  +40,081
AUD   -63,183 vs  -71,117
JPY     -71,721 vs  -78,353
Specs are still adding on to long Euro positions!

Europe order book:
Stop loss: 1.3250/60, 1.3310/20 and 1.3345
Limit: 1.3150/45

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Initial downside pressure but susceptible to shortcovering

Technically, shorter intraday momentum is suggesting consolidation but longer intraday is still pointing lower. Do note that bullish convergence signal has emerged but still premature to ascertain a bottom yet. I expect minor whipsaw price action and prefer to trade from the long side. Shall observe how the momentum unfold in the next 4-8hrs for more confirmation.

E$ 8hourly chart 

Friday, 30 August 2013

Liquidity is back!!

Next Monday is Labor Day in the US and it marks the unofficial end to summer. Not coincidentally, it also implies a return of liquidity to normality which we have already noticed in the past couple of trading sessions.
Just take note that today is the last day of August and month end flows can disrupt the regular rhythm of the market.
Quite a good spread of data to keep the market engaged (All in Sin/HK time)
1400hrs  German Retail Sales
1600hrs  Italian Employment data
1700hrs  Eurozone CPI Flash Estimate + Unemployment rate
2030hrs  US Core PCE Price Index
2145hrs  Chicago PMI
2155hrs  Revised UoM Consumer Sentiment

CFTC COT report: Speculator's accounts
               31 Jul             6 Aug            13 Aug          20 Aug
EUR      - 8,504           + 6,061          +16,057         +36,746
AUD     -72,573          -76,779           -62,721          -63,183
JPY       -82,135          -80,213           -74,462          -71,721
Not surprised by the turnaround in E$ when spec accounts have such a directional bias.

NY order book:
Stop loss: 1.3185/80, 1.3205/00, 1.3300, 1.3345/55 and 1.3395/405
Limit: 1.3185/80, 1.3205/00 and 1.3395/405

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Consolidation with upside bias

Technically, the downside easy money is probably over for now. Shorter intraday indicator is getting close to o/b but longer intraday is at o/s levels. Shorter intraday momentum is starting to indicate waning downside momentum whereas the longer ones are still pointing lower. Taking other technical readings into consideration, the most likely outcome: a potential test at yesterday's low of 1.3219 but 1.3180/90 should hold for rebound.
Based on current development, E$'s 1/2 weeks technical picture remains bearish for 1.3100 but for today, one should not get overly bearish when closer to 1.3200.
With this scenario, one can attempt a speculative buy dip with tight stop below 1.3150 on first test (before 1.3300 is seen). Sell rally can probably be held back till next week.

E$ Monthly chart - 2 possible Intermediate trend

Monday, 12 August 2013

USD has run its course?

Back after a short break and here's what I see unfolding:
1. These recent months of USD bull run is probably at its tail end or already run its course.
2. Euro, the quasi-USD, may soon feel the pressure as EURxxx start to correct the recent months of bull run.
3. If a major reversal is imminent, how does that correlate with the equity markets?

CFTC COT report: Speculator accounts as of 6 Aug 13
EUR:  -  8,504 vs  + 6,061
AUD: -72,573 vs   -67,797
JPY:   -82,135 vs   -80,213
Note: EUR has finally swung into net long. A$ and USDJPY are susceptible to short squeeze and long liquidation respectively.

Europe order book:
Stop loss: 1.3285/75, 1.3425 and 1.3450
Limit: 1.3235/30, 13300, 1.3350/55, 1.3390/400, 1.3410/20 and 1.3480/85

Primary trend: Bullish
Intermediate trend: Bearish for 1.2800/50
Minor trend: Mildly bearish

Technically, shorter intraday indicators are in o/s territory which could provide support at 1.3300 for now. However to note, the longer intraday still has room and the daily/weekly indicator are still in o/b zone. The dark-cloud cover candlestick pattern on Friday and the bearish divergent signal have both increased the probability of a near term top. Expected range 1.3350/60 to 1.3230/50.

E$ 8-hourly chart - Bearish divergence in the mature stage

Thursday, 1 August 2013

E$ resisting in a strong USD environment...

E$ continues to resist against the USD strength on the back of firm EURxxx, notably EURAUD. At the current level of 1.4800, I believe EURAUD still has another wave higher (potentially 1.5350/5400) to complete this recent rally before a meaningful correction. This should provide us the cyclical timing as to the reversals of both E$'s near term top and A$'s near term bottom. After this EURAUD's parabolic surge, a subsequent correction back towards 1.43/4400 is expected in the weeks' ahead.

Do note that the USD index continues to look firm and I would expect the greenback to appreciate against most currencies at least in the first half of August. With that, USDJPY should get a boost for 101.50/102.00 with strong support at 97.00/50.

CFTC COT Report: Speculator's accounts as of 23 Jul 2013
EUR:   -27,900 vs -37,165
JPY:    -87,496 vs -85,762
AUD: -63,982 vs - 70,686

Europe order book:
Stop loss: 1.3165/50, 1.3210/00, 1.3350/55, 1.3380 and 1.3420
Limit: 1.3165/50, 1.3210/00 and 1.3345/50

Primary trend: Bullish
Intermediate trend: Bearish for 1.2800/50 (to be reviewed if 1.3416 breached)
Minor trend: Range ahead of US employment data tomorrow

Technically, shorter intraday indicators have slipped into o/s level while the longer ones are only just coming off the o/b zone. This may suggest limited downside with an increased probability of overnight high being retested. Intraday momentum indicators suggest a high probability of range consolidation with an initial bearish divergent signal which is still too premature to put heavier weightage on. But do note that the daily indicator is still pointing firmly higher which should caution one against going aggressively short in the E$ just yet. Expected trading range 1.3320/30 to 1.3220/30 (on first test only).

E$ 8-hourly chart - Initial bearish divergent signal, still premature.......
Last update "Are we done yet?", 24 Jul 13, I have warned of a potential bounce in A$ around 0.8870/900. However, based on current development, price remains heavy and A$ looks vulnerable for 0.8600. Strong resistance 0.9100/20 should cap any rebound for this round. At this point in time, the cyclical timing seems to coincide with the EURAUD view above. Will update if new signals emerge.
A$ 8-hourly chart - Price action remains vulnerable to the downside