Bruised but not hurt.....

A currency with ambition, plans its advance carefully.

I outlined 2 possible scenarios yesterday and E$ chose the healthier choice, for obvious reasons. The only one thing was the correction was slightly deeper down to 1.3172 but it finished the day with a firm close at 1.3224, comfortably above the pivot.

Some of you questioned the strength in E$ as it is indeed difficult to reconcile with the fundamentals. If I may take you back to my earlier blog "Its my turn, said EUR" (23 Feb12), I mentioned that EUR was in for a multi-week bull run and it is materializing. This explains the underlying strength in E$ as it gets support from mainly the crosses against commodity currencies ie. EURNZD, EURAUD & EURCAD. Coincidentally, scenario (b) is unfolding now :)

As I have guided yesterday, E$ is eyeing 1.3300 which in my opinion is a transit point rather than a destination. I shall be watching 1.3400/20 for now, 1.3600 never left my mind.


All the best!


Update1: Just take note that momentum has turned down for the hourlies which suggest E$ may test support at 1.3200/20 before higher again. Profit taking in the EURxxx is evident. But no change in the overall bigger picture.


Update2: Stops built up at 1.3160 just under yesterday's low makes E$ vulnerable. Be mentally prepared, if 1.3200/20 support gives way, market should go for the that level. However, 1.3140/50 should hold for reversal.