Market went into a limbo yesterday following Friday's surge as focus is turning back to the eurozone in the meantime before Thursday's FOMC decision. Come Wednesday, if it is not postponed, the German constitutional court will announce their decision on the legality of the ESM. If its found to be illegal, it will be short term E$ negative.
Admittedly, I must smack myself for missing such an important signal last Friday (see chart below) as I was distracted by a couple of other technical signals. This break is crucial and it does affect my decision-making when combined with the other technical tools. :(
On the stop loss orders, we have a nice 2 ways pattern: 1.2855, 1.2850, 1.2825/20, 1.2710/00 and 1.2690. Noteworthy limit orders can be found at 1.2840/35 and 1.2710/00.
Technically, intraday indicators have unwound itself off the extreme o/b condition amid shallow correction. Shorter term intraday momentum indicators are pointing to further consolidation though longer term indicators are still pointing firmly up. I would expect further consolidation within 1.2700/20 to 1.2820/40 for now with an eventual break on the upside towards 1.3000.
For today, trade the range on first test with tight stops.
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| E$ Daily - Important break to the upside |
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