On the fundamental side...... China's 25bps rate cut coupled with upbeat remarks from Merkel provided the boost for AUD$ and EUR$ to their day's high of 1.0002 and 1.2625 respectively. Then dovish remarks from Bernanke followed by Spain ratings downgrade by Fitch changed the risk sentiment sending them lower.
On the stop loss side, topside 1.2650 escaped being triggered and now leaves a string of downside stops looking very vulnerable. They are 1.2540 (cleared), 1.2440, 1.2385/80 (Large), 1.2360 and 1.2330/20.
Guess it became obvious that profit taking should be the best thing to do after recent sharp gains in the currencies on the expectation of QE3.
On the technical side..... upside momentum has waned and turning down which suggest a correction of recent run up is underway. I will not be surprised to see E$ return near to its weekly opening price of 1.2401 by NY close. In the following week, E$ being the weaker currency against its commodity counterparts, I am mentally prepared for E$ to correct as low to the recent 1.2288 as possible before rebounding again.
EUR$ 1.2600/20 to cap and 1.2450/60 (1st stronger support) to hold (1.2380/2400 news induced).
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