E$ spent Monday consolidating its gains within my expected range as guided yesterday. High printed 1.3477 and the low 1.3424. Looking at the chart, one wonders if we are in the 4th of 5th and expecting another spike higher or we were already done and consolidating for the next leg lower. Either way, we seem to be close to the tail end of this recent rally. At this moment, I can't get too excited for a follow through of E$ towards 1.3800 or even 1.4000 for this round as I need more technical signals to support that scenario. Neither am I ready for a reversal call for E$ to head back to 1.3200. Shall we just take things one step at a time? Having said all these, I must remind all once again that ultimately, I am bullish the E$ in 2013 and my first target is 1.3800 but at this moment, 1.3480-1.3530 remains as a near term formidable resistance band as highlighted last Friday. Lastly, I want to remind myself that this current cycle, the greenback is the main actor and euro is only playing the supporting role.
London order book:
Stop loss: 1.3350/40, 1.3380/70, 1.3410/05, 1.3510/15
Limit: 1.3410/05, 1.3495/500 and 1.3550
Technically, if E$ continues to consolidate in this fashion (same range) for another 16 hours, chances are that upside momentum would have turned to down and will become more vulnerable to breaking the lower band for a test to 1.3370/80. However, daily momentum remains firm and we must bear that in mind. A subsequent rebound to retest 1.3480/90 is highly likely but these price actions will probably stretch into Wed/Thu. For the next 24hours, I placed a 60/40 chance for a lower E$ and would sell into rally. Stay nimble!!
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| E$ 2hourly chart - 4th of 5th? |
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