Fed's hawkish minutes provided market the best excuse to dump the E$ and flushed huge amount of sell stop orders from 1.3310ish down to 1.3240ish. A rare occasion where the greenback won against almost every other currency. Admittedly, I was thrown off and bruised. Looking back, I should have held back the bullish tone at least till E$ close above the pivot level of 1.3450 post the major risk event instead of jumping the gun. Guess, I was in a way influenced by the firmer EURAUD and EURGBP pair, in which I will elaborate more on the EURAUD below. From now till the Italian election result, E$ may stay more on the conservative side in case of a Berlusconi victory which is E$ negative.
London order book:
Stop loss: 1.3220, 1.3235/30 and 1.3305-20
Limit: 1.3235/30
Technically, intraday indicators are in o/s levels though not at extreme. Shorter intraday oscillator indicators are showing waning downside momentum as bullish divergent signal emerges but longer intraday indicators are still pointing lower. Taking all other technical readings into consideration, I have more signals supporting a near term bottom though cannot confirm a reversal of the recent weeks' downtrend yet. 1.3450 remains an important pivot level and a daily close above would be needed to strengthen that view. Expected range 1.3200/20 to 1.3290/3310. Would like to take a chance to buy on dip on first test with stop below 1.3170. Market will be choppy, so do not forget your trailing stop.
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| E$ Daily chart - Trend line support |
Just a quick one on EURAUD since I was having a chat with my friend. This euro cross is set for a bull run this year after years of sell-off. This bullish view is supported by the bullish divergent signal and the bullish engulfing candlestick pattern. This is a medium term call and I will go micro later. Just want to push this update out asap.
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| EURAUD 12-weekly chart - Bullish chart pattern |
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