What happened during my absence? The anticipated short squeeze came fast and furious on the last day of June clearing most of the buy stops on it way up to 1.2693 from the low of 1.2407. In hindsight, that move was when market retested the break in the long term trend line (see chart) where it failed and was rejected. Celebration for the bulls was short-lived as E$ made an about turn the very next trading day. It erased all gains and broke an important low at 1.2288 before finding some support at 1.2234 this morning before it consolidates ahead of the ECOFIN meeting tomorrow.
Stop loss orders seem sparse at 1.2200 and 1.2505 only.
Technically, short term momentum has turned to consolidation to up while the longer term is still firmly pointing down. Shorter term indicator is showing mild bullish divergence which has increased the probability of a near term bottom. Bears should start looking to scale out their shorts and look for sell opportunities at higher levels again.
Expect today's low to be challenged again but I don't expect follow through for now but instead consolidation with an upside bias at least for the next couple of days. Main trend for now is bearish and on the week, I will be looking to sell the rally.
Hope this is sufficient for now while I try to get back into the market rhythm and provide levels when I am ready.
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| E$ Monthly chart |
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