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.
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| E$ 8-hourly chart - Still below trendline |
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