E$ was initially rejected twice at the resistance band at 1.3020-50 but on its third attempt it broke through convincingly to the high of 1.3124 after the NY market closed. I must admit that the spike up did surprise me. It is apparent that the market is going into Thursday's EU leaders meeting with quite a bit of optimism. Though I am bullish the E$ in the months ahead, I am expecting further consolidation
within 1.2800/20 to 1.3150/70 for at least another week before the breakout.
An update this morning of the noteworthy orders revealed the following:
Stop loss: 1.2933/30, 1.3121 & 1.3150
Limit: 1.3150
Technically, intraday indicator has gone into o/b territory with the shorter end showing sign of bearish divergence (see chart). This has increased the probability of a near term top in place and should warn against being too aggressively long at current levels. Momentum continues to point higher following the sharp run up and showing no indication of E$ turning down for now. However, if E$ slips below 1.3060/80 in the next couple of hours, the probability of a top being form will increase substantially.
For today, I expect another spike higher to break this morning's high of 1.3124 but capped below 1.3150/70 and subsequently fall back to support band 1.2990/3010.
All the best!! I will try to get up earlier tomorrow :)
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| E$ Hourly chart - Sign of bearish divergence |
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