Friday, 30 August 2013

Liquidity is back!!

Next Monday is Labor Day in the US and it marks the unofficial end to summer. Not coincidentally, it also implies a return of liquidity to normality which we have already noticed in the past couple of trading sessions.
Just take note that today is the last day of August and month end flows can disrupt the regular rhythm of the market.
Quite a good spread of data to keep the market engaged (All in Sin/HK time)
1400hrs  German Retail Sales
1600hrs  Italian Employment data
1700hrs  Eurozone CPI Flash Estimate + Unemployment rate
2030hrs  US Core PCE Price Index
2145hrs  Chicago PMI
2155hrs  Revised UoM Consumer Sentiment

CFTC COT report: Speculator's accounts
               31 Jul             6 Aug            13 Aug          20 Aug
EUR      - 8,504           + 6,061          +16,057         +36,746
AUD     -72,573          -76,779           -62,721          -63,183
JPY       -82,135          -80,213           -74,462          -71,721
Not surprised by the turnaround in E$ when spec accounts have such a directional bias.

NY order book:
Stop loss: 1.3185/80, 1.3205/00, 1.3300, 1.3345/55 and 1.3395/405
Limit: 1.3185/80, 1.3205/00 and 1.3395/405

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Consolidation with upside bias

Technically, the downside easy money is probably over for now. Shorter intraday indicator is getting close to o/b but longer intraday is at o/s levels. Shorter intraday momentum is starting to indicate waning downside momentum whereas the longer ones are still pointing lower. Taking other technical readings into consideration, the most likely outcome: a potential test at yesterday's low of 1.3219 but 1.3180/90 should hold for rebound.
Based on current development, E$'s 1/2 weeks technical picture remains bearish for 1.3100 but for today, one should not get overly bearish when closer to 1.3200.
With this scenario, one can attempt a speculative buy dip with tight stop below 1.3150 on first test (before 1.3300 is seen). Sell rally can probably be held back till next week.

E$ Monthly chart - 2 possible Intermediate trend

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