For those who were never convinced of the full moon effect, I hope last Thursday and Friday's price actions would have gained a little of your respect :)
Friday saw market short covered ahead of the weekend so-called troika meeting. Of course, when it concluded on Sunday, this was what you can take away from the joint statement by the EC, ECB and IMF... "The discussions on the implementation of the program were productive and there was overall agreement on the need to strengthen policy efforts to achieve its objectives." Ok, whatever positivity you can squeeze out of that statement but as usual they will be returning to Athens in early September to continue the discussions... anything new? However, the reassurance from Italian PM Mario Monti that Italy does not plan to seek financial aid from its Eurozone peers was the impetus for E$ to push through resistance at 1.2400. Another factor for E$'s bullishness is probably because market is refocusing on US QE3 now.
Latest CFTC speculative accounts again trimmed their net euro short position to -138,994 from -155,066.
A quick recall on the Elliot wave count (read from 31 July).... the corrective 'C' wave actually ended at 1.2134 on early Friday morning and the new impulsive wave is unfolding and this put 1.2700 in the radar.
Technically, intraday to daily indicators have shot itself into o/b level and it seemed like a consolidation at this stage is required to unwind that condition. Intraday to daily momentum have turned up with the weekly turning from down to neutral, whereas the monthly continues to be pointing lower. That being said, the probability of higher E$ in the coming days has increased substantially. However, at this stage I identified 2 way opportunities depending on your risk appetite. If E$ rallies again, before Europe comes in (provided 1.2300/20 is not seen first), then I believe at 1.2460/80 region provides good resistance for this round to fade into (against trend). If not, I will be looking to buy into dips.
For today, 1.2300/20 to hold (1.2250/30 news induced) and 1.2460/80 initial resistance and stronger at 1.2540/50.
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