Monday remained a range bound day despite negative news that Moody's has revised the outlooks on the AAA sovereign ratings of Germany, Netherlands and Luxembourg from stable to negative. Having factored in quite abit of negatives and yet price is holding at current levels, makes E$ susceptible to positive news relating this currency.
Based on yesterday's order book, remaining stop loss orders were found at 1.2045/40 and 1.2000 (both large). Hearing buy stops have build just above 1.2150.
Do be aware that EURJPY has reached levels where the Japanese authorities are concerned and the shocker for E$ shorts will be an intervention by BOJ.
Technically, short term momentum has turned to consolidation to up but the longer term is still pointing lower. The past 24hrs consolidation has also unwound its o/s condition but there is still more room to unwind. E$ closed "doji" yesterday which indicates uncertainty (not directional) and can be a precursor to volatility. Downtrend remains very much intact but there is some scope for corrective spikes higher where one should take the opportunity to establish new short positions.
For today, 1.2170/90 to cap on first test and initial support at 1.2080/90, 1.2040/50 and then 1.2000/20.
Update1: Covered my shorts from last week @ 1.2043. Will wait till tom to re-assess. Good nite!!
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| E$ Daily chart - Bearish channel |
All the best!!
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