Looking back at the past 8 days' price action, one would have noticed the defined range of 1.2800 to 1.3000. With the more recent rejection at the 1.3000 resistance, E$ could be pressured to retest the lower band of the range this week. The 61.8% retracement level is at 1.2873 and the trendline is around 1.2850 where some stop loss orders are currently lurking. Having said that, we have to take note that last week actually closed a bullish piercing candlestick pattern. Therefore, one should not get overly bearish when near to the lower band. For today, without much fundamentals driving the market, it may end up being stop loss seeking, whichever is nearer (check out the Europe order book).
CFTC COT speculator's orders as of 21 May 2013:
Eur: -80,949 vs -46,921 (net shorts increased by 73%)
Jpy: -95,186 vs -78,560
Europe order book:
Stop loss: 1.2860/50, 1.2960/65 and 1.3050
Limit: 1.2820/00, 1.2993-98 and 1.3000
Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Bearish within the 1.2800-1.3000 range
Technically, intraday indicator is at around the neutral 50. Intraday oscillator indicator is suggesting consolidation within 1.2890/900 to 1.2960/70 before expanding to 1.2840/50 - 1.2960/70 during the NY session. I would look to fade into the rally for today with risk above 1.3000.
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| E$ Daily chart - Defined range for next 48 hours |
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