Okay, we now have the U.S. election behind us and Ben Bernanke is very likely to remain as the chief of Fed. No major changes as far as policies is concerned for the financial markets in the near term horizon. For now, President Obama had better get as much of his well deserved sleep because in the days ahead, his next challenge is to work with the Republican camp to quickly come out with solutions to avert the fiscal cliff come end of this year.
As expected, E$ reacted positively to the result and spiked higher to touch high of 1.2876 when the result was announced. Of course in hindsight, market has already factored in an Obama victory yesterday by buying up risky assets and E$ closed with a tweezer pattern (circled).
Meantime, let the market celebrate "for longer QE" before the attention is swung back to the problems in Europe.
Order book is starting to get busy again:
Stop loss: 1.2740, 1.2885 and 1.2890/00
Limit: 1.2750/60
Technically, intraday indicator and momentum have all turned higher increasing the probability of a near term bottom being formed. The short covering may take us back to the 1.2950/70 region to retest the trend line but I remain skeptical that E$ can sustain this rally as the weekly chart remains bearish for now. EURAUD continue to look heavy as market switched to risk loving mode. I still maintain the wide range I mentioned yesterday, which is 1.2600/50 to 1.2960/80. We are stucked just below first resistance at 1.2870/80 for now. For today, I prefer to be fading into rallies but would stay patient for now.
All the best!
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| E$ Daily chart - Retesting trend line |
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