E$ managed to hold off the selling pressure with a low of 1.2846 against Wednesday's low of 1.2843 before shortcovering to a high of 1.2929. E$ then came off and closed Thursday at around 1.2883. Admittedly, we are very closed to critical level of 1.27447 where a break would change the intermediate trend picture to bearish and E$ can fall to 1.24/1.25 (as per H&S formation in the chart on 15 May, Tue). There is a mixed bag of technical signals with the bearish ones dominating for now, ie weekly momentum is still pointing lower. However, there are a few supporting signals for 1.2800 to hold for a rebound where one of them is the intraday and daily indicators are at extreme o/s zone. Currently, there are talks of a large option barrier at 1.2950 and this will provide market incentive for a deeper squeeze higher.
Europe order book:
Stop loss: 1.2800/790, 1.2850/40 and 1.2910/20
Limit: 1.2850/40 and 1.2950
Primary trend: Bullish
Intermediate trend: Bullish (unless 1.27447 breached)
Minor trend: Mildly bullish
Technically, intraday indicators are in o/s zone and I do not see any sell-off to be sustainable. As the range consolidation continues, the intraday oscillator indicator is starting to show waning downside momentum. As I have warned in the past 2 days, one should not get overly bearish when closer to 1.2800. The signals are stronger now. For today, I have still not discounted the possibility of a test at 1.2800/20 and therefore today's expected range is from 1.2800/20 to 1.2950/60.
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| E$ Weekly chart - Either way, E$ is expected to finish higher this year |
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