Its not over till its over.....

Goood Monday morning, folks!!! Apologies for the late update, was unexpectedly delayed.

In hindsight, taking profit at 1.293ish on Friday seemed like a great trade now. I am so glad that I stuck to my basic guidelines to enforce discipline in profit taking and instituting trailing stop. Just like the  shocking result of the Ryder Cup this morning where the European came from behind to defeat Team USA...  "Its not over till its over" said Jose Maria Olazabal, Captain of the European team 2012, on Saturday evening when they were trailing 6-10. Lesson here for trading is, we can never be too sure of an outcome despite all the supporting technical signals.

I have to admit that I have left one element out in my overall consideration of Friday's market. That was the potential influence of the full moon and the quarter end closing. I believe it does have some bearing.
By the way, the full moon effect can still last till Tuesday.

E$ got hit real bad on the back of rumour that Moody's will be downgrading Spain's status to 'junk' today, sending the european currency down to flush sell stops at 1.2825 this morning. Last heard on Friday was that the remaining sell stops are residing at 1.2800 and 1.2780. Asian hours liquidity will suffer as the Chinese will be out for the whole of this week.

CFTC speculators account revealed that net euro short position fell to -50,238 (25 Sep) vs -73,482 a week ago.

Technically, intraday indicator is at o/s level but momentum continues to point firmly lower with an early bullish divergence signal emerging. Though market has rebounded off low of 1.2804, E$ still looks heavy below the daily MA21 (see chart). As I have mentioned in 'Caught in between...', 26 Sep Wed, the 1.2800/20 is a crucial and if we close below this pivot level, E$ is vulnerable to fall further towards 1.2550. Though at current level, E$ is susceptible to a short squeeze, I am not keen to buy into this move but instead would await to sell into rally at around 1.2940/50. This is at the moment a low percentage call and would to prefer to react when market unfold further. For day scalper, 1.2760/70 may offer some support and 1.2870 resistance on first test.

All the best and update tomorrow will be delayed.

E$ Daily chart - DMA21 and trend lines