Good morning friends!!
What happens when market becomes directionless and goes into a limbo? Chances are that it will go in the path with least resistance and gun for stops. Based on yesterday's information, these were the levels.... 1.2624/1.2640/1.2765.
Gathered that last evening's sell interest around 1.274ish came from a diverse group which included real money managers, CTAs, hedge funds and a couple of sovereign names. Stronger offers are lurking around the 1.2800 region (trendline).
Overall trend remains bearish with 2012's low of 1.2623 within sight but E$ held up pretty ok despite Fitch and Moody's downgrade of Greece and Spain respectively.
Back to pure technicals...... short term momentum is neutral but longer term is still pointing down. E$ remains in oversold territory with bullish divergence emerging. I continue to believe that a sustained downward move on the E$ is limited for now and it is still worth a try buying on dip but only nearer to 1.2620/30 for 1.2730/40.
Will update again later if any change in signals.
All the best and have a great weekend.
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