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