True enough, E$ had another push higher on Thursday and printed 1.25893 high for the week before spending Friday correcting itself lower as technical signals suggest lost of upside momentum. As seen in the chart, it seemed apparent that the E$ is contented to trade within the bullish channel until the next piece of positive fundamental news to take it exponential. Highest probability of that happening could be this Friday's Jackson Hole symposium, where central bankers, policy experts and academics gathered, because of the topics that they will be discussing on. Well at least it sounds like this time its not going to be another waste of taxpayers money event. For today, thanks to the German IFO business climate data to be announced at 4pm (Sin/HK) or it may be pretty lacklustre as UK will be out.
As a result of the short squeeze last week, CFTC speculative accounts is showing another drop in the net euro short position to -123,932 from -137,810.
Stop loss orders revealed from source last Friday shows the following levels: 1.2390, 1.2480 & 1.2620. Strong offers were seen at 1.2590, 1.2600 & 1.2650.
Technically, intraday momentum is suggesting further consolidation and last Friday's dark cloud cover formation, has increased the probability of further pressure on E$ to correct lower than Friday's range. Having also considered the fact that the topside band of the channel had just been tested and rejected, chances of sideways to lower price action ahead of Friday is highly likely.
For today, I expect up > down price action, but I would prefer to fade into rallies with 1.2560/80 to cap and 1.2420/40 to hold.
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| E$ 8-hourly chart |
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