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