E$ finally pushed past 2012 high of 1.34866 to print 1.34968, only to be denied 1.3500 as the Asian sovereign name defended that level ahead of the 1.3000-1.3500 DNT (Double No Touch), suspected to be expiring sometime this week.
Asian order book:
Stop loss: 1.3350/40, 1.3380/70, 1.3410/05 and 1.3510/15
Limit: 1.3497/500 and 1.3550
Technically, shorter intraday indicators showing weakening momentum and expect E$ to first correct itself lower. Do note that the longer intraday and daily momentum remains firm which warns of another challenge on the upside after this consolidation, probably timing it to the FOMC statement release next morning at 2:15am (Sin/HK). I expect Ldn/early NY range to be confined to 1.3420/30 to 1.3485/95. Expanded range 1.3380/90 to 1.3530/40 on any surprises. In the meantime, I can't get overly bullish the E$ over 1.3530/40 as there are more signs of short term reversal than a sustained rally.
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| E$ 4hourly chart - Signs of near term weakness |
EURGBP
Recent weaker fundamentals had GBP hammered sending this cross skyward. In all things, a parabolic move is often followed by a pause to consolidate before its next wave higher, if any. The risk of going counter-trend is obviously high but with sufficient supporting technical signals, it is worth a try if risk/reward is probably controlled. In this case here, on the monthly chart, EURGBP has hit the MMA50 and also the Fibonacci 61.8% ratio. To further reinforce that, we have a harami/hanging man pattern on the daily chart with bearish divergence signal in the intraday momentum. Expected range 0.8500/10 to 0.8580/90.
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| EURGBP Monthly chart - MMA50 and Fibonacci 61.8% |
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