Finally back to the market.... admittedly, I have lost touch with the fundamentals for the earlier part of the week but focus should now be on UK's rate decision, MPC and ECB statements this evening. Highlight of the week will be tomorrow's US employment data.
Stop loss orders from yesterday's order book remains very light with only one at 1.2490/80.
Technically, intraday indicators are pointing at o/b condition though intraday momentum has turned higher. Daily momentum has also turned higher as a result of the higher trading range of 1.2465 to 1.2635 in the past eleven days, after it broke out of the consolidation at 1.2370. However, I am not
too enthusiastic in jumping into the bullwagon just yet. Somehow the stop loss orders stand out as a beacon and it is nestled nicely at the lower band of the channel where it may just draw sellers to trigger that and retest the trend line before rebounding. With the current levels in the range of technical tools, I can think of 2 possible scenarios:
1. E$ makes another push higher from around current levels but cap at 1.2710/20 and then turn around for the lower band.
2. E$ falls towards lower band first, takes out the stops and then turn higher towards 1.2710/20.
With that in mind, I prefer to position myself only when market nears the 2 boundaries.
By the way, underlying momentum remains bullish for the E$ and I believe we can see E$ testing 1.2800 in the coming weeks. ('Happy days ahead for EUR?' dated 15 Aug 12)
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| E$ 8hourly chart - Bullish channel |
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