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