Nothing really exciting to talk about the E$ with market still happy to stay within the defined range of 1.3250/60 to 1.3380/90 for probably the next 12 hours. However, there is a new development as the daily momentum starts to turn from consolidation to potentially higher. With that, one has to be mentally prepared for expanded range of 1.3200/20 to 1.3430/40. I still maintain that the 1.3480-520 resistance band to be formidable and market will be rejected on first test and on the downside, 1.3250/60 will be taken out and 1.3200/20 tested by this week. As we are nearing the tail end of the tapering consolidation, one must avoid trading around the mid-range. Instead, be positioned to sell into the rally, that is before 1.3200/20 is tested first. In a situation like this, one should split and engage market on a tiered basis with corresponding stop loss level too. All that being said, I see upside bias from current level of 1.331ish for the scalpers!!
Noteworthy orders from the Asian book:
Stop loss: 1.3240, 1.3260/50 and 1.3405/10
Limit: 1.3260/50 and 1.3395/405
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| E$ 8hourly chart - Expanded range |
Since E$ is getting boring, I shall move over to this pair today. Generally, the upside momentum is waning and bearish divergence signal has emerged. Its highly likely that we might have seen the short term top around Y90 and a correction lower is due within a very bullish trend in the week ahead. I see Y86.60/87.00 to provide strong support for this dip.
For today, some signs of near term JPYxxx bottoming out should see Y88.30/40 (stronger at Y88.00) to provide support for a rebound to Y89.00/50.
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| USDJPY 8hourly chart - Bearish divergence signal |
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