Given a longer period like 2 to 3 years, the E$ may gravitate towards parity considering the fact that the American economy has probably seen the worst during the Lehman crisis and Europe is still struggling with a potential time bomb that has not even exploded yet...... but I am not holding my breath.
So what now? European leaders met, they discussed, they agreed on some things, they disagreed on some and they went home feeling accomplished, just like the past meetings. Will Greece leave the Eurozone? I may be wrong but I reckon they do not have the government in place to make that executive call for now. Fundamentals are definitely supporting a lower E$ but CFTC positions are screaming record net short levels. Most of the downside stop losses have been flushed yesterday leaving mainly buy stops above with a notable size one at 1.2695. If E$ were to fall further, profit taking will kick in and buy stops will naturally be cancelled too.
On the technicals front, E$ has slipped back into oversold territory but not extreme yet. Bullish divergence has emerged but short to longer term momentum have not turned up yet. As of this point in time, I would place a 55/45 chance that technical signals are supporting a rebound.
So how best can one devise a plan to massacre the market resulting in both buyers and sellers losing their pants? One more sharp jab at 1.2480/520 region to clear some more sell stops and draw in more sellers before reversing to close the day firmer with follow through upside momentum tomorrow to close the week nearer to the upper half of the range? Let's see what happens.....
I will take a calculated risk to buy dips today. 1.2480/520 to hold 1.2620/30 first resistance. For those who may want to ride the rebound, hold to see 1.2820/30 retested sometime next week where I will be holidaying with my family.
No comments:
Post a Comment