Thursday, 28 March 2013

Last day of full moon zone....

Good to be back. Indeed, E$ rallied to close the gap at 1.2999 and subsequently spiked to a high of 1.3048 before turning down south printing a low of 1.2751 overnight, "Cyprus to dictate again....", 22 Mar 2013. I should have just included in my Friday's blog to forewarn all of full moon zone which starts on Monday and ends today. For the non-believers, Monday's vicious whipsaw was quite typical (of varying magnitude) within the full moon zone. 
Currently, general sentiment remains negative for the E$ as market braces itself for potential bank runs in Cyprus, which in turn poses a systemic risk to the other peripherals. 
As market will be watching for development out of Cyprus and Europe later, do be aware of the potentially higher volatility and news driven price action amid a not so liquid condition ahead of the month/quarter end and Easter holiday. If everything is under control as opposed to how market has positioned itself, we can see E$ shortcover.

Primary trend: Bullish
Intermediary trend: Bearish for 1.2650/80 (price back inside bearish channel and staying below DMA200)
Minor trend: Bearish (Spillover momentum but watch out for sharp rebound when close to 1.2650/80)

CFTC COT non-commercial speculator account revealed that market has increased their net short euro positions to -44,880 vs -24,787. However, net short jpy positions were reduced to -79,993 vs -93,763.

Asian order book:
Stop loss: 1.2750, 1.2890/910, 1.2920 and 1.2930/50
Limit: 1.2735/25

Technically, shorter intraday indicator has turn up but the longer ones are still in or near o/s levels. Though intraday oscillators remain mixed, one must respect the relatively bearish candlestick on Wednesday which should have sufficient spillover momentum to pressure E$ lower. Expected range 1.2820/30 to 1.2700 (expanded 1.2650/80). A break of 1.2867 would alleviate some bearish pressure off E$. If you must trade, stay very nimble and don't forget your trailing stops.

E$ Daily chart - Staying under DMA21(Red), 50(Green), 100(Brown) & 200(Blue)
Reason for absence: Was bedridden for 5 days fighting high fever fluctuating between 38.5 to 40.1 (minor support at 39) degree celsius. Trust me, I tried plotting for patterns. The 40.1 was really the 5th wave!!

Friday, 22 March 2013

Cyprus to dictate again....

Despite improving technical signals, negative news out of Cyprus continues to dominate and overwhelm. E$ was sold off in the earlier trading session (news driven), falling to a low of 1.2880 but found bids and gradually rebounded to 1.2942 before it got hit by another piece of news during the late NY session. The strength of the rally was milder than expected and up till this point in time, price remains under the trendline. Deadline for Cyprus to come out with a solution is extended to Monday and therefore I would expect market to stay lacklustre and consolidate. It will be interesting too to observe if price is able to hold and cross the trendline based on time later today. Having said that, I must remind all that we are in an intermediate bear trend and any shocks out of the eurozone can send E$ down to its fibonacci 61.8% target at 1.2650/60, as this is the path with the least resistance. I must admit that the string of buy stop orders is looking very tempting.

Primary trend: Bullish
Intermediate trend: Bearish for 1.2650/80 (still within bearish channel, gap not closed and below 1.3120/30 pivot)
Minor trend: Mixed (back to news driven for now)

NY order book for your guide (Asia's update did not provide anything meaningful):
Stop loss: 1.2840, 1.2875/70, 1.2980, 1.3000/05, 1.3010 and 1.3040/50
Limit: 1.2840, 1.2880/75, 1.2980 and 1.2995/3000

Technically, intraday indicators are at mid level and oscillators are suggesting further consolidation but since we are closer to the lower band, there is slight upside bias from here with expected range into European session being 1.2880 to 1.2950. Risk/reward does not seem to work in our favour for now and I would like to lock in the overnight profit and probably close the book for this week unless Cyprus surprise us on the upside. Then I would probably look at the chance of closing the gap at 1.2999 and subsequently 1.3040/50 to cap.
E$ 8-hourly chart - Still below trendline

Thursday, 21 March 2013

Minor trend flipping....

Fed did not provide anything new to jolt the market but BOJ Kuroda did overnight. There was speculation that Bank of Japan will accelerate the monetary easing to quickly achieve the 2% inflation target that he set out at his first press conference. This resulted in a wave of USDJPY and EURJPY buying pushing E$ to touch 1.2978 high before it fell back to close at 1.2939, forming a bullish piercing candlestick pattern. Gradually, technical signals are beginning to swing from bearish to mildly bullish over the past couple of days.
Fundamentally, Cyprus remains as a time bomb until an acceptable resolution. Other than that, a slew of economic data releases out of Europe into NY should provide sufficient stimulant.

Primary trend: Bullish
Intermediate trend: Bearish (price still within bear channel and pivot at 1.3120/30)
Minor trend: Mildly bullish (bullish divergence and bullish piercing pattern are putting pivot back on the radar)

NY order book: (No meaningful update on Asian book yet)
Stop loss: 1.2840, 1.3000/05, 1.3015 and 1.3040/50
Limit: 1.2990/3000

Technically, shorter intraday indicators are getting near the o/b zone though not extreme. Intraday momentum suggest that market to consolidate within yesterday's range. With that, I expect E$ to push higher first but capped around 1.2960/70 before falling back probably during the Europe/early NY session. However, there is a good chance of seeing firmer price action again in the NY session.
For today, expected range 1.2880/90 to 1.2990/3000 (1.3030/40, news induced). I prefer to buy on dips, scaling in at various levels starting from around 1.2920 (with the smallest notional). Stop below 1.2840. Monitor short term oscillators for more precise entry levels.
E$ Daily chart - Still trapped but bullish signals gaining

Wednesday, 20 March 2013

Fed in limelight tonight....

Yesterday's session appeared more like stop loss orders seek and flush mission than anything else as the Cyprus' consensus vote against the bank deposit levy was very much expected right from the start. The sell-off cleared several levels of sell stop orders till the lowest batch of noteworthy ones which resided at 1.2855-40 ("Main actor... Cyprus", 19 Mar). E$ touched low of 1.2843 before rebounding sharply to 1.2923. It then settled and consolidate around 1.2860/80 flirting the DMA200 before firming to current level. Despite closing below 1.2900, the daily oscillator is surprisingly indicating waning downward momentum. This environment will put E$ in a vulnerable position for short squeeze as the Europe order book is also starting to see a short side bias in the market. This is in no way hinting at a reversal of the intermediate but more of a turn in the minor trend. The pivot at 1.3120/30 is still the critical level.

Event risk is the Fed's rate decision / FOMC statement (2.00 / 2.30am Thu, Sin/HK) and this could the trigger for any shortcovering.

Primary trend: Bullish
Intermediate trend: Bearish for 1.2650/80 (Still within down channel, watch pivot at 1.3120/30)
Minor trend: Mixed (bullish divergence signals caution against getting overly bearish)

Europe order book across the market:
Stop loss: 1.2840, 1.3000/05, 1.3015 and 1.3040/50
Limit: 1.2960/70 and 1.2990/3000

Technically, intraday indicators are off the o/s levels. Intraday oscillator indicators are still pointing lower. However, the daily momentum is starting to turn from down to consolidation, which at current level would mean scope for more upside. In view of the event risk, will be mentally prepared for expanded range of 1.2830/40 to 1.3040/50 on first test.
Guide for tonight, trade in a smaller notional and try to scalp from extremes rather than mid-levels going into the announcement. Watch the short intraday oscillators for reversal signals when around boundaries for more precise entry level. Be nimble and don't forget your trailing stop.

E$ 8-hourly chart - Though downward momentum is waning but .....

Tuesday, 19 March 2013

Main actor.... Cyprus!

E$ came shy of just a few pips to close the gap but sellers overwhelmed and price dropped back to consolidate  around 1.295ish level. A daily close forming a long-legged doji candlestick pattern indicate uncertainty with slight upside bias. However, I still maintained that it is highly risky to take side at this current level as market awaits the Cyprus' parliamentary decision on the deposit tax legislation. Price action continues to be very consolidative, a clear sign of neutrality awaiting a potential overwhelming fundamental.

A tabulation of the signals:

  • Price below pivot level of 1.3120/30 
  • Price still within bearish channel
  • Daily and weekly momentum still indicating scope for downside
  • Gap not closed yet


  • No follow-through selling after Monday
  • A rejection just above DMA200 at 1.2870/80
  • Market could be overly bearish at this moment
  • Emergence of bullish divergent signal

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Mixed

Europe order book across the market:
Stop loss: 1.2855/40, 1.2860, 1.3005, 1.3010 and 1.3040/50
Limit: 1.2855/40, 1.2985/75 and 1.2990/3000

Technically, intraday indicators are in neutral levels. Intraday oscillators continue to point down though there is bullish divergent signal (too premature to confirm yet). Given a very mixed bag of indicators, I would still see bears having a slight edge at current level but market is susceptible to short-covering and overshooting. I see strong support at 1.2860/70 and 1.3050/60 to cap, both on first test. Will be happy to scalp from both extremes with tight stops. Admittedly, it will have to be a low percentage call today as market is more fundamentally driven at the moment.
E$ Daily chart - Gap not covered but no follow through yet...

Monday, 18 March 2013

Still innocent until proven guilty...

Market opened with a massive 120+ pips lower following the news out of Cyprus over the weekend. The bears have exerted their authority as it took E$ back inside the channel after its attempt at the pivot of 1.3120/30 was thwarted on Friday. It managed to touch 1.31078 high before closing the week at 1.30739, which was above the trendline though. As mentioned in "3 more signals to cancel out...., 15 Mar", Friday's close only managed to cancel out 1 bear signal which has yet to turn the tide around. Prudence must prevail as the overwhelming fundamental has disrupted the natural rhythm of the market and at this moment will be hyper-sensitive to any news out of the eurozone. Many will be keen to see how market is going to react to cover the gap. If anything, bears are still in control until the pivot level is re-captured. Next focus will be the Fed rate decision and FOMC statement out on Wednesday (Thu, 2/2.30am Sin/HK).

CFTC COT report revealed that speculative accounts have reduced their net euro short position marginally to -24,787 vs -26,116. Net jpy short position increased further to -93,763 vs -73,351. 

Technically, intraday indicators are all in o/s territory (obviously) and the current consolidation is unwinding that condition. Downward momentum is strong and the daily indicator is starting to turn back lower again. At the moment, I would prefer to step aside and observe the price actions before formulating a trading plan. Support at 1.2860/80 and resistance 1.2990/300.
E$ Weekly chart - 50% achieved, 61.8% next?

Friday, 15 March 2013

3 more signals to cancel out....

A better than expected US weekly jobless claims data sent E$ to a 1.29108 low before it rebound to squeeze out buy stops above 1.3005 and extend to a high of 1.3032 before closing at 1.30038. I have a strange feeling the Asian sovereign name is back (wink!). Based on the overnight price action, it has  indeed strengthened the E$ recovery story by another notch though overall signals are still mixed. Now this explains why I have refused to put out a follow through sell call yesterday.

Bearish signals:

  • Price still below pivot level of 1.3120/30
  • Daily oscillator is still pointing down though signs of slowing
  • Price still below bearish channel trendline
Bullish signals:
  • New lows are shallower and bottom is rounding off (see chart)
  • MACD is converging suggesting waning downside momentum
  • Daily trend indicator shows that E$ is ripe for a reversal
Despite the conflicting signals, one has to maintain that the bear camp still has the upper hand until technical breaches to confirm it (innocent until proven guilty). 1.3120/30 remains an important pivot level where a weekly close above (would also be a close above the red trendline) would be a good signal that the trend might have turned. 

London order book across the market:
Stop loss: 1.2850 and 1.2960
Limit: 1.2880/60 and 1.3070/80

Technically, a close at 1.30038 indicates strength. Intraday indicators are close to o/b levels though not extreme. However, intraday momentum has turned up firmly. Main resistance is at 1.3120/30 now. For the conservative, you may want to await for the weekly close for more confirmation. For the aggressive, who is afraid to miss the buying, you may scale in with a small position first on any shallow pull back and look to buy again on strength subsequently. I expect 1.3120/30 to be tested again today. Expected range tonight 1.3000/10 to 1.3160/80.

E$ 8-hourly chart - Rounding bottom with MACD converging

Thursday, 14 March 2013

Losing rhythm,,,,,,

E$ continues to stay offered against a weakened technical picture as euro negative fundamentals overnight drove the pair to break through the tough support at 1.2950 and flushed stops down to 1.2923. This opens up the next support band at 1.2850/80 and put 1.2650/80 back on the radar. As long as E$ is unable to close above the 1.3120/30 pivot level and below the down channel trendline, bears will continue to have an upper hand despite waning downside momentum, which makes long side scalp risky as evident by my buy call yesterday. Signals continue to be mixed as the daily trend indicator also suggest that E$ is ready to reverse the recent sell-off. Amid this contradicting environment, I am not able to feel the rhythm of the market and it gets tougher committing to a view. This may also explain why the Asian sovereign name has not been appearing for the past one over week.

European order book across the market:
Stop loss: 1.2850, 1.2920 and 1.3005/10
Limit: 1.2880/60

Technically, intraday indicators are nearing o/s levels but definitely not extreme yet. Intraday momentum is starting to turn lower to coincide with the daily signal. Price action does look heavy going into the eurozone's employment number, which can inject volatility. I see 1.3000/20 to cap with support only coming in at 1.2850/80. I would have to place this as a low percentage call for now while I await for further development to get back into the market rhythm.
E$ Daily chart - Rejected at DMA100, gravitating towards DMA200

Wednesday, 13 March 2013

Neutral zone....

E$ rallied on the back of Goldman Sachs "Buy" recommendation on EURGBP during the NY session and pushed the pair to a high of 1.30748, flushing a batch of stop loss orders in the process before profit taking set in on chatters that Commerzbank may need a capital increase in the region of E700-800million. Real money accounts were also seen as active euro crosses buyers. This has in a way supported a near term trend reversal story as each single day price hovers around current levels, the sell momentum is waning as indicated by the oscillator indicators and price action is already forming a round bottom pattern. On the flip side, E$'s inability to close on a daily basis above important technical levels have drawn in sell interest targeting 1.2850/80. It does look like we are into another lackadaisical session but hopefully the eurozone industrial production (1800hrs Sin/HK) and US retail sales (2030hrs Sin/HK) numbers can inject some life back into the market.

New York session order book: (Asian book not updated yet)
Stop loss: 1.2920, 1.2950 and 1.3140
Limit: 1.2880, 1.2955/50 and 1.3090/00

Technically, like it or not, most intraday indicators have moved into the neutral zone except the oscillator has a slight edge on the upside. Expected range 1.2980/300 to 1.3140/50. For those who are long, 2 levels of stop... < 1.2970 and 1.2940 and profit take 1.3130/40 and 1.3170/90. Watch the intraday oscillators, stay nimble and don't forget your trailing stop.

E$ 4-hourly chart - Price action starting to form a round bottom

Tuesday, 12 March 2013

No man's land....

Totally uncommitted and lacklustre price action since the week started with low so far at 1.2979 and high established in NY yesterday at 1.3053. A subsequent close at 1.3045, below resistance at 1.3050 is a bearish signal and market is now hammering the E$ back below 1.3000. Technical signals continue to stay mixed with daily trend indicator showing signs of a near term bottom but daily momentum continues to point lower. As long as E$ stays below the pivot point of 1.3120/30, bears will have the upper hand for now. It will be much clearer if E$ can clear and stay above 1.3180/200 to really turn the table around.

CFTC COT report on non-commercial speculators' position revealed that euro has slipped further into net short at -25,888 vs -9,394 and net short yen at -73,351 vs -65,344. Though not at historical low levels but it does indicate that market is starting to get more directional which makes it susceptible to short term counter-directional squeeze.

London session order book across the market:
Stop loss: 1.2930, 1.3070 and 1.3140
Limit: 1.2880, 1.2955/50 and 1.3090/00

Technically, shorter intraday indicators are slipping close to o/s level (definitely not extreme yet) and longer ones at pretty neutral level. Intraday oscillator indications continue to suggest range trading with the bears having a slight edge with daily momentum supporting. At this point in time, defined range on wide 1.2940/50 to 1.3120/30. However, E$ is susceptible to a fall towards 1.2850/80 before stronger technical support comes in.
2 possible scenarios:
1. E$ short squeeze to test 1.3180/200 first then turn lower to take 1.2940/50 out for 1.2880/50.
2. E$ break lower to test 1.2880/50 and then shortcover to test 1.3180/200.
Frankly, we are in no man's land and my preference for now is to go long E$ only when it breaks 1.3060 and take profit around 1.3160/80. Will consider turning short around 1.3180/200 for 1.3120/30.
Stay nimble and don't forget your trailing stop.
E$ 4-hourly chart - Price action flattening out to meet trendline

Monday, 11 March 2013

E$..... Gangnam style

A much better than expected set of US employment numbers sent E$ plummeting to 1.2955 low on Friday to almost cover the full range of the previous day's bullish engulfing candlestick. However, more crucial, 1.2950 held and subsequently rebounded to current level of around 1.3005. Obviously, market just refused to reveal a clear signal just yet despite the bullish candlestick pattern on Thursday. As guided in "New signals..., 8 Mar", a close above 1.3120/30 pivot would have been a good indication of the bulls having an upper hand, though they will still have to contend with 1.3180/200. As long as market stays below the DMA100, the bears have an edge. Important support at 1.2950 must hold. A break will expose 1.2850 with stronger support at 1.2660/80. Meanwhile, the rising tensions on the Korean Peninsula can be the source of near term intraday volatility.

I have not received an update on the CFTC COT report yet.

Asian order book across the market:
Stop loss: 1.2950
Limit: 1.2880, 1.2950 and 1.3090/00

Technically, intraday indicators are coming out of its o/s levels but signals are mixed on the momentum through the different time frames. Daily momentum however remains bearish and that should constantly be a guide to any bulls out there for the time being. Resistance are at 1.3050, 1.3120/30 and very strong at 1.3180/200. At this moment, those holding on to their long E$ should take part profit below the resistance levels with risk below 1.2940. I still see a slight edge for the bulls. Expected range 1.2960/70 to 1.1.3120/30.

E$ Daily chart - A base is being formed

Friday, 8 March 2013

New signals.... (Updated1)

E$ fulfilled the forecasted normal range as outlined in "Testing channel resistance.... (Update1), 7 Mar 13". E$ shorts scrambled to shortcover overnight when ECB stayed pat on interest rate, followed by mildly hawkish comments (relative to recent developments in Europe) during the conference. Clearly, 1.2940/50 level has formed a solid base for this currency to propel higher, printed high of 1.31181 and closed above 1.3100 at 1.31053. The price action yesterday has triggered signals that we have not witnessed since E$ descended from the recent high of 1.37106. The obvious one being a bullish engulfing candlestick pattern which is a strong reversal signal. The daily bullish divergence, coupled with firming intraday momentum have increased that probability to a significant degree. However, in all things, further confirmation like recapturing with a daily or weekly close above the pivot at 1.3120/30 will a good signal that the bulls have taken charged. Next important level to watch will be 1.3170/90 (trendline resistance today). US employment numbers tonight will be the impetus. Let's see if the market what to divulge more by its weekly close.

Market order book
Stop loss: 1.2950 and 1.3128
Limit: 1.2950, 1.3160/65 and 1.3195/00

Technically, intraday indicators are now coming out of its o/b levels as market starts to consolidate with downside bias as upside momentum wanes after failing to clear resistance at 1.3120/30 overnight. However, longer intraday momentum has turned up coinciding with a possible trend reversal indicator signal. I expect E$ to drift lower with support around 1.3050/70 (stronger at 1.3020/30) into the London session. 1.3120/30 remains as initial resistance with a potential test of 1.3170/90 today during the NY session. I'll buy the dips limiting my risk to below 1.2940. For the data tonight, if it comes out within expectation, expected range 1.305/70 to 1.3170/90. Otherwise, expanded range 1.3020/30 to 1.3170/90.
E$ Daily chart -  Bullish Engulfing pattern

Wednesday, 6 March 2013

Apple Inc., still searching for a bottom

This is for my golf buddies who have been talking about Apple Inc. each time we met. Question remains, Apple has fallen so much, time to bottom fish especially when the broad market is moving higher? I have not been following the fundamentals but one thing for sure, as long as Apple is playing catch up instead of being a market leader with the cutting edge technology, I can't be convinced to commit to a recovery story just yet. Just logically speaking, when Steve was really ill and subsequently passed away on 5 Oct 2011, price was consolidating between $360 to the $410 level (circled). If the new management cannot convince investors they have the foresight and ability to lead the company to stay on top of the game, what can convince us that price can hold above that level then. The post Steve Jobs rally is over and price should subsequently fall back into the circled range, if not lower, and await for positive development.

Short term: Indicators are suggesting a near term bounce as downside momentum starts to wane. Short term range $420 - $470. No technical signals of a major trend reversal at all at this stage.

Longer term: Trend indicators have all point to a major bull trend reversal and one should expect this to last for awhile as market needs to consolidate after the parabolic rally (burst bubble). The fast money is over as Apple slows down its descent. I expect further pressure after this short term rebound into the $360 - $410 range where it should then be ready for stronger rebounds within a wider consolidation. $330-350 should provide solid support and $500, solid resistance.
Apple Inc. Monthly chart - Still searching for a bottom

Testing channel resistance.... (Update 1)

Up till this point in time, E$ is unfolding as guided in my update yesterday. E$ first rallied to touch high of 1.30749 before it fell back to 1.30098, only to find strong bids and managed to hold off anymore assault on the downside. It rebounded and has been holding 1.3030/40 till now. In the short term, the past 48 hours' price action suggest more upside potential for E$ but one has to bear in mind the market psychology as we gets closer to Thursday as there have been chatters of possibility of a rate cut by ECB. At this moment, market is probably eyeing the stop loss orders up there. However, E$ may very quickly reverse its gain and we may find this pair back below 1.3000 ahead of the announcement. Therefore, learn to take profit today and don't forget your trailing stop. Daily closing will be closely watched as E$ may flirt around the 1.3130/40 pivot and will be tricky. It will be tempting to go short around those levels but will need confirmation on the technical signals before committing.

Asian order book across the market highlighting only the noteworthy ones:
Stop loss: 1.2950, 1.3080 and 1.3105/10
Limit: 1.2880 and 1.2950

Technically, intraday indicators have moved off from its o/s levels overnight but it still has room on the upside. Intraday oscillator indicator is pointing strongly up suggesting healthy momentum for E$ to test higher. Current price action suggest that any correction will be shallow as it gears itself for an impulsive rally. 1.3080/90 being a minor resistance with stronger at 1.3120/30. E$'s probability to sustain above 1.3130/40 will drops off significantly for this wave. Before 1.3120/30 is seen, 1.3020/30 should hold on first test.

E$ 8-hourly chart - Testing the top of channel
Sorry friends, got caught up the whole day and reckon I will only find time later tonight during the NY session to provide a more detail update.
Meantime, just a quick study of the technical signals suggest that underlying momentum is turning up and that has increased the probability of a near term base formed around 1.2940/50. One has to note that market has to certain extent priced in a possibility of an ECB rate cut already. If rate stayed unchanged and/or Draghi issue a slightly hawkish statement, E$ will short cover and rally towards 1.3120/30. Strong support comes in at 1.2870/80.
In summary, ECB rate announcement is a major risk event and it will overwhelm technical signals. Normal range 1.2940/50 to 1.3120/30. Expanded range 1.2870/80 to 1.3170/90.
I placed 60/40 probability for a higher E$ today.

Tuesday, 5 March 2013

Momentum waning....

E$ attempted several times but failed to break new ground as Friday's low of 1.29668 held overnight. A late rebound resulting in a firmer day close at 1.3025 formed a mildly bullish signal which market reacted accordingly up till this point in time. High so far had been 1.3060. Daily oscillator indicator is throwing out a bullish divergent signal (see chart) but it can still be premature to confirm. Taking into consideration other technical signals, price action is no longer as bearish as it was last Friday and there is an initial sign of market bottoming but it is also too premature to confirm. However, a weekly close above pivot level of 1.3120/30 would weaken the recent bear trend.

London order book across the market:
Stop loss: 1.2950, 1.3080 & 1.3105/10
Limit: 1.2880 and 1.3080

For today, shorter intraday indicators have gone into o/b zone and shorter intraday oscillator is suggesting the upside momentum is waning. Longer intraday indicator is just coming out of the o/s level and its momentum is turning from down to consolidation which at current level would suggest more potential for uptick. Putting them together, I expect price to ease off from the high for now but would consolidate for the next leg higher. 1.2990/310 should provide good support before E$ attempts at 1.3080/90 and then 1.3110/20 (on first test). Bulls would have to back off thereafter and await further signals. Risk should be limited to below 1.2965 for this round.
E$ Daily chart - Bullish Divergent signal

Monday, 4 March 2013

Spillover momentum first...

E$ closed February at 1.3055 confirming a very bearish Bearish Engulfing candlestick pattern. It quickly made its presence felt as it started off the first day of March breaking February's low of 1.3018 to print 1.2967 before a mild rebound to close the week. With this scenario, the level of 1.2690/700 is put back on the radar screen.
For this month, I expect a pretty whipsaw one. First week of March will probably see market riding on the bearish momentum to push lower probably towards 1.2850/900 on the back of a potential rate cut decision come Thursday. That may be followed by a phase of consolidation. and then a short squeeze back to 1.3260/3300 before falling back to retest the low again.

CFTC COT report: Speculative accounts have changed sentiment as net euro positions have turned to -9,394 vs +19,103. JPY net change remains marginal at -65,344 vs -65,891.

Asian order book across the market:
Stop loss: 1.3115/20 and 1.3165-85
Limit: 1.3100 (opt), 1.3130/40 and 1.3160/65

Technically, intraday indicators are in o/s level and shorter intraday oscillators are showing signs of waning momentum but longer ones are still pointing lower, though there is a premature indication of bullish divergence. At current parameters, market would more likely to hold and rebound if there is another sell-off. For today, the more likely scenario would be 1.
Scenario 1:
Market correct higher but capped at 1.3080/90 and fall through to 1.2930/50 and close low.
Scenario 2:
Market drop towards 1.2930/50 and then rebound to probe resistance at 1.3080/120.
E$ Monthly chart - The ominous Dark Cloud Cover
In "V-shaped recovery, 6 Feb 13", I projected a couple of check-points for AUD$ before its target of parity. First was 1.0220 where it held the AUD$ for awhile before it broke lower again. Second mark is 1.0150 and low today 1.01568. Price action continues to suggest more downside potential as market position itself for the RBA rate decision tomorrow morning at 11:30am (Sin/HK). Current sentiment remain dovish as a 25bps rate cut is being factored into the price now. Even if RBA does not cut tomorrow, a knee-jerk rebound will probably be sold off again as the probability of the rate cut would be even higher in the next meeting. For this week, 1.0230 should cap and target of 0.9960/1.0000. Thereafter, bears have to be a bit more cautious to look out for short squeeze signals.
AUD$ Monthly chart - Remains heavy