Friday, 28 June 2013

Patience is key....

Despite the exceedingly good US pending home sales data last night, E$ held 1.3000 and quickly rebounded to its comfort zone around 1.3030/40 and consolidated till now.With HK's property cooling measures in place, we don't need a rocket scientist to do the maths to determine the latest destination of the wealthy Chinese's investment.
For the past 24 hrs or so, though E$'s trading range has been tight and unexciting, it has in fact revealed a couple more supporting signals for an imminent rebound. Firstly, 1.3000 seems to hold quite well and secondly, price has drifted past trendline resistance turned support (see chart). Of course, E$ bulls still have quite abit of work to do as it is currently still trading below important pivots, the daily MA100 (1.3064), MA200 (1.3074) and MA50 (1.3085). However, other bullish signals like the bullish convergence and o/s daily indicator keeps hope alive, not forgetting the firmer EURxxx.

NY order book: (from last evening)
Stop loss: 1.2985/80, 1.3055-60, 1.3065-70 and 1.3110
Limit: 1.2960/50

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mildly bullish for 1.3200/50

Technically, shorter intraday indicators are approaching o/b zone but still room for upside move. Longer intraday indicators are only just coming out of the o/s territory. Intraday momentum indicators are beginning to turn from mixed to slight upside bias. Taking into consideration all other technical signals, R/R favours trading from the long side. Expected trading range 1.3010/30 to 1.3130/40. Its Friday, stay nimble and learn to take alittle profit around the daily MAs if momentum starts to falter.
E$ Hourly chart - More signals to support a rebound

Thursday, 27 June 2013

Finding a bottom....

Europe order book:
Stop loss: 1.2985/80, 1.3050-60, 1.3067-70 and 1.3110
Limit: 1.2960/50 and 1.3070/80

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mildly bullish

Technically, shorter intraday indicator has come way off the o/s territory though the longer one is still just coming out of the o/s zone. Intraday oscillator indicators are showing a mixed bag of signals. Expect an initial see-off to retest yesterday's low of 1.2985 but I can't get overly bearish as bullish convergence signals have emerged and the daily indicator is at the o/s zone. Expect today's range 1.2960/80 to 1.3060/80.

E$ Hourly chart - More bullish convergence. R/R should caution getting overly bearish here...

Wednesday, 26 June 2013

Counting down....

E$ continues to consolidate in a lacklustre fashion as if it was awaiting a certain trigger for a move either way. 1.3030/40 (61.8% fibo retracement) is probably a level market hopes to achieve if overwhelming and relevant fundamental is available to trigger that move. If not, strong bids around 1.3060/50 and the string of buy stops would mean a short squeeze being a more attractive proposition.

Asia order book:
Stop loss: 1.3115, 1.3130, 1.3160/65, 1.3175/80 and 1.3200/10
Limit: 1.3030-20 and 1.3060/50

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mildly bullish - Corrective rebound for 1.3200/50

Technically, intraday indicators have all slipped back into the o/s territory though not extreme. Intraday momentum indicators are suggesting consolidation but the daily is still pointing lower which calls for caution as general trend remains bearish. However, with the emergence of the bullish convergence signal, it has increased the probability of a near term bottom forming. For today, I expect trading range between 1.3030/40 to 1.3180/3200.

E$ Hourly chart - Bullish convergence has increased probability of rebound

Tuesday, 25 June 2013

Lopsided order book an implication?

Overnight, E$ dropped to a low of 1.3059 before it shortcovered to print 1.31458 high and subsequently closed at 1.3117 to form a "doji". Up till this point in time, the price action is very much within expectation except that it has not pushed higher yet. Looking at the order book, it is quite apparent the stop loss orders are quite lopsided. Market focus is on the US durable goods data at 2030hrs (Sin/HK) and US consumer confidence at 2200hrs (Sin/HK) for today and probably the ECOFIN meeting starting tomorrow.

Europe order book:
Stop loss: 1.3030-20, 1.3160, 1.3175/80 and 1.3200/10
Limit: 1.3030-20

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mildly bullish for 1.3200/50

Technically, shorter intraday indicator are nearing the o/b level but longer one is still in the o/s zone. Shorter intraday momentum continues to suggest consolidation while the longer one is still pointing lower. Looking at other technical signals, I expect E$ to hold 1.3070/80 for a test towards 1.3200 in the next 36hrs. Still prefer to trade on the long side until 1.3059 compromised.

E$ 8hourly chart - Expect a bounce into 1.3200/50 within 36hrs but can't get overly bullish.... 

Monday, 24 June 2013

E$ to correct recent fall....

In my last update "Bears to take a break...", 20 Jun13, E$ performed as expected over Thursday to Friday with price first falling to 1.3161 before a mild rebound to 1.3254. It then subsequently fell to my forecast target of 1.3100/20 and for today, we have just touched a low of 1.3079. In just over 3 days, E$ has lost three hundred and thirty + pips. What next? Though last week's candlestick range did not totally satisfy the criteria of a bearish engulfing pattern, its strong downward momentum has already revealed itself up till this point in time. However, latest technical signals are starting to show signs of a near term bottom and it will be elaborated in the technical section. In the meantime, the German Ifo Business Climate number at 1600hrs (Sin/HK) should be the highlight for today.

CFTC COT report - Speculative account (as per 18 Jun 13)
Net EUR: +20,030 vs -7,533
Net JPY:  -61,890 vs -72,906

Europe order book:
Stop loss: 1.3030-20, 1.3180 and 1.3200/10
Limit: 1.3030-20, 1.3075-70 and 1.3150

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mildly bullish

Technically, intraday indicators are in o/s levels. Shorter intraday oscillator indicator is showing signs of bullish convergence and suggest consolidation, which at current level of 1.3100 would imply more upside potential. However, caution must still be taken as longer intraday momentum indicator is still pointing down for now. After the low of 1.3079 is seen, the probability of a stronger rebound to correct last week's fall is probably going to take place. For today, expected range 1.3060/80 to 1.3170/90 and I prefer to trade from the long side.

E$ Daily chart - Risk/reward favours a corrective rebound

Thursday, 20 June 2013

Bears to take a break....

Thank goodness the E$ outlook is not as hazy and hazardous as the air over us (some politicians have to be more responsible).
In my update titled "Eyes on Bernanke..." (22 May 13), my target of 1.34/35 for the intermediate trend has been achieved and E$ should now be due for a correction lower whereas the greenback will take centre stage once again. In yesterday's brief update, my target of 1.3250 has also been hit and E$'s next target could be 1.3100/20.

Europe order book:
Stop loss: 1.3150 and 1.3416/17
Limit: 1.3150 and 1.3400

Primary trend: Bullish
Intermediate trend: Range between 1.2800 to 1.3400
Minor trend: Bearish

Technically, shorter intraday indicator has gone into extreme o/s level but the longer one still has abit more room for further downside. Shorter intraday momentum indicator is starting to show a slowdown in the rate of selling though the longer one is still pointing firmly lower. In view of this conflicting signal, one cannot get overly bearish when E$ nears the 1.3160/80 band (on first test) for this round. At this stage (low so far 1.3193), I would expect E$ to attempt another low before a mild rebound towards 1.3250/60. I would look to fade into the rally but that should be held back till tomorrow.
E$ 8hourly chart - E$ to retrace from recent rally

Wednesday, 19 June 2013

Bears to take over soon...

I shall resume with the more elaborate analysis from tomorrow.

But for now, I can't get overly bullish when E$ crosses above 1.3400. For this round, 1.3500 seems toppish and risk/reward favours fading into rally with rates potentially falling back to 1.3250.

We should slip into the full moon zone by the time Fed makes the press conference tonight. So be careful of the characteristic whipsaw price action and stay nimble.