Indeed, E$ retested 1.3400 last night, touching a high of 1.3393 and continues to stay within the well defined wider range despite some volatility on the back of a couple of European economic data releases. Some anticipation of today's ECB LTRO repayments announcement provided support. But the undercurrent that really underpin the E$ was the revival of the USD. Confused? For those who have been following my blog since last year, you would have remembered that in several occasions that I mentioned that euro is the new USD or left-hand-side (LHS) currency. Yesterday, the euro and USD were the strongest against most major and minor currencies. What is more significant is that, there are further technical confirmation of the early stage of a medium term bullish trend. That being said, the USD will ultimately overtake the euro to be the strongest, at least for Q1. Though in second position, euro should continue to stay relatively firmer against most other currencies. Is this a signal that the US economy is already on the upswing and eurozone has seen its worst?
Asia order book:
Stop loss: 1.3240, 1.3300/285 and 1.3405/10
Limit: 1.3250 and 1.3395/405
Technically, E$ is unwinding from its o/b levels with no follow-through from yesterday's rally past 1.3400. Longer intraday indicator has yet to show signs of waning momentum but toppish technical signals across the EURxxx helped in my overall analysis of the E$ today. Still maintain range bound (1.3250/60-1.3380/90) with risk of breaking on the downside towards 1.3200/30. For the prudent, a part profit take around 1.3270/80 is advised. On the risk part, stop should be placed above 1.3430. 1.3480 to 1.3530 remains as very formidable resistance band.
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| E$ 8-hourly chart - MA21 (Red), MA50 (Green) , MA100 (Brown) |
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