E$ spent most of yesterday's session hovering around the top end of its daily range after it rallied sharply right off the first hour of the day. We will be expecting the GDP number at 1000hrs (Sin/HK) to get a clue of the Chinese economic health and later today, the EU Economic Summit. All these with E$ starting the week gaining around 250pips from the low to the highest point. With first sign of bearish divergence yesterday coupled with weakening upside momentum overnight, the probability of lower E$ today has increased substantially.
Based on last night information, here are where the noteworthy orders are lurking:
Stop loss: 1.3040, 1.3150, 1.3160, 1.3170/72, 1.3180 & 1.3200
Limit: 1.3150, 1.3200, 1.3220 & for 1.3250 (Large barrier)
Clearly, the market is heavily loaded with buy stops around the previous high of 1.31718 which stick out like a beacon.
Technically, shorter intraday indicator is heading into o/s level, though not extreme yet but that should provide some support in the meantime. However, longer term intraday indicator is still in the o/b zone which suggest market may spend more time unwinding that condition and that should put pressure on E$ to trade lower. Intraday momentum is starting to turn from flat to consolidation which of course will put pressure on E$ too since it is still around the higher side of the range. Having said that, the daily and weekly momentum remain pointing up which supports an underlying bullish tone.
For today, I expect a correction of the recent rally which actually is healthier for E$ if it was to break above the recent range. Since the underlying trend is up, I shall be conservative on the support levels. I expect the trading range to confine to 1.3040/50 to 1.3150/70 for today. I will be a keen buyer when closer to 1.3000 but will put this on hold until price action unfolds later today as it may be a more news driven session.
All the best!
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| E$ 2hourly chart - Retest trend lines? |
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