Engulfing all the way...

Overnight comment from ECB Weidman sent E$ down to an intraday low of 1.3001. This resulted in 3 consecutive days of engulfing candlestick pattern, a very rare occurrence indeed!! Fundamentally, with his comment that ECB might adjust interest rates if new information warrants it, it has become a perfect storm for the E$ as on the other hand, the US Beige book was interpreted as more on the hawkish stance. Though the underlying tone is bearish, the easy money going short E$ is over and we are in the zone where we should be mentally prepared for whipsaw and volatile price actions.
Event risk today is the Italian Presidential election.

Primary trend: Bullish
Intermediate trend: Bullish (until 1.27447 is breached)
Minor trend: Counter-directional consolidation before another wave lower (but can't get overly bearish when nearer 1.2920/50)

Asia order book: (no update on the European book yet)
Stop loss: 1.3205
Limit: 1.3195/200 and 1.3220

Technically, shorter intraday indicator has unwound its o/s condition though the longer intraday is still in o/s levels (not extreme). Shorter intraday oscillator indicator indicates consolidation but longer intraday momentum is still pointing lower. One has to take note that E$ has breached several technical levels and coupled with a weak close yesterday, spillover momentum should take us another wave lower. Expected range 1.3060/80 to 1.2930/50.

E$ Daily chart - 3 consecutive engulfing pattern days!! Last one wins....

E$ Daily chart - Rejected at upper band, testing lower?

Bear to bull trap....

It seems like there was this deliberate effort to draw in more speculative shorts in euro this week. Monday's price action (bearish engulfing candlestick pattern) set up the first bear trap and encouraged a further build up of buy stops above 1.3100. The second bear trap was the initial sell-off post the weaker than expected German ZEW number, first falling to 1.3028 before turning around sharply. A series of notable stop loss orders were triggered up to 1.3170 and 1.3180. Suspected large option barrier at 1.3200 was tripped too as high printed was 1.3202. Finally, I feel vindicated as I have been mentally prepared for this squeeze for the past few days, except that it surpassed my target marginally. As of now, market attention may soon turn to the sell stops that have been building up since the past weeks.
Expect tight sideway consolidation for time induced weakness in price action as supports move higher to form resistance.
Fundamentally, with much anticipation of Fed pulling the plug on further QE earlier than expected, E$ should trade softer into tonight's Beige book at 2am (Sin/HK Thu).

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Bearish (Probably completed the 5 wave and has increased the risk for downside from here)

Asian order book:
Stop loss: 1.2990, 1.3020/00, 1.3110/00, 1.3140 and 1.3205
Limit: 1.3020/00 and 1.3220/28

Technically, intraday indicators are in the o/b zone though not extreme. Shorter intraday oscillator indicators are indicating upside momentum waning and price action suggest consolidation between 1.3150/60 to 1.3200/10. Longer intraday oscillator indicator is still pointing higher but if correction takes E$ below 1.3165 and consolidate for an hour or more, it will weaken the technical picture for the bulls. A potential scenario for today: E$ correct lower to 1.3150/60 before higher again for its last peek at 1.3205/20 before it starts it hunt for sell stops down to 1.3060/70. Adjust your stop and take profit levels accordingly. Lastly, don't forget your trailing stop.

E$ Daily chart - 1.3220/30 should provide strong resistance for this round

Short squeeze keeps E$ stable.... (Update 1)

E$ was dragged lower by the fall of the commodity currencies albeit at a relatively slower pace, resulting in firmer EURxxx. For today, E$ should remain stable as market is potentially short squeezing overnight short positions of commodities. Let's see if ECB Draghi will add some volatility as he is due to speak at 9pm (Sin/HK).

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Consolidate within 1.3010/20 to 1.3130/40 with eventual break towards 1.2930/50

London order book: No update due to technical feed problem

Technically, intraday indicators needs to unwind its o/s condition. Intraday oscillator indicator suggest consolidation and at current level may have upside bias. Though E$ closed a bearish engulfing candlestick pattern, price action suggest that we may not be ready to break down yet. Expected range today 1.3010/30 to 1.3130/40.

Update1: Looking to split sell rally at 1.3130/40 (1/3 ratio) and 1.3170/80 (2/3 ratio) with stop above 1.3210 with profit take at 1.3050.

E$ 4-hourly chart - Consolidation before lower

Initial target hit, whatz next for XAUUSD?

Reference my last update on XAU$, "Inverted hammer, 18 Feb 13", we have reached the target range of $1,400/$1,500. Clearly, the characteristic of this wave is impulsive and I believe the WMA200 support will not be able to hold this sell-off. Downside momentum is strong and there is scope for the yellow metal to fall deeper into the $1,050/$1,200 zone. There are still lots of XAU$ held in portfolios and just last week, there were still calls to buy the dips. In view of that, XAU$ should fall another 20-25% to trigger margin calls and flush out stubborn longs. Interestingly, I wonder how the AUD$ and worldwide equities would correlate to this move.....

Primary trend: Bearish
Intermediate trend: Bearish
Minor trend: Bearish

XAU$ Weekly chart - Testing WMA200 support

E$ defying gravity for now....

Last Friday, E$ consolidated mostly within Thursday's range but pushed higher to close at 1.3111 despite a weaker environment for commodity related assets like AUD$, oil, copper and more notably, XAUUSD which plummeted through the $1,500 psychological support to close around $1,485 with a follow through this morning to $1,429.08 low so far. What are the implications? Resurgence of the USD or risk-off? Whatever the reason, one must stay vigilant and alert as turning point in any asset groups can be a prelude for the rest of the financial markets.

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Nearing tail end of recent rally. Trend technical tool suggest higher downside risk for the next 200/300 pips.

CFTC COT report revealed that non-commercial speculator accounts have reduced their net euro short position to -50,858 vs -65,701. Net short JPY dropped very marginally to -77,697 vs -78,171.

Asian order book: (No updates yet)

Technically, shorter intraday indicators are in neutral zone while the longer one is just coming off the o/b level. Shorter intraday oscillators are pointing to consolidation and longer intraday has just started to turn down which increased the risk for downside vis-a-vis the upside. At this moment, I am mentally prepared for an exhaustive spike towards MA200 (Blue) at around 1.2940/50 (typo error) 1.3140/50 before lower. Stronger resistance stands at 1.3160/80. Expected range today, 1.3000/20 to 1.3140/50. Prefer sell rally strategy.

E$ 8-Hourly chart - MA200 resisting amid first sign of bearish divergence

Bulls on steroid starting to look tired...

E$ bulls continue to reinforce its intermediate trend as it broke above March's high of 1.31339 to print 1.3138 before falling back to consolidate just above the DMA50, which sits at 1.3100 today. Thursday was a tricky day as it first broke Wednesday's low and then rally to break its high at 1.3122. For the minor trend, somehow I feel the risk for the next 200 points move is more on the downside than up. Strong resistance stands at 1.3160/80.

Primary trend: Bullish
Intermediate trend: Bullish (reinforced by breaking March's high of 1.31339 yesterday)
Minor trend: Up / Down (nearing tail end of recent rally, awaiting for longer intraday momentum to turn down)

Europe order book:
Stop loss: 1.2990, 1.3060/40, 1.3142/51, 1.3170 and 1.3180
Limit: 1.2980, 1.3080/70, 1.3142/51 and 1.3195/200

Technically, intraday indicators are approaching o/b level but definitely not close to extreme levels. Shorter intraday oscillator indicator are mixed but the longer intraday ones are still pointing higher (a good reminder for one who may get overly bearish). I normally prefer to await the longer intraday and hopefully daily momentum to turn down before committing a bigger notional. For today, expected range 1.3000/20 to 1.3120/30 (would love to fade into rally if near 1.3160/80).

E$ 4-Hourly chart - Bearish divergence further developing

Bulls running out of steam...

E$ extended it rally to touch a high of 1.3122 before giving up most of its gains to close at 1.3070, lower than its open price at 1.3082. This price action has reinforced the possibility of a completion of the 5th wave and increased the probability of a correction lower from here as guided in "Bearish divergence but bulls are still stubborn", 9 Apr Tue. At this moment, 1.2930/40 (50% fibo ratio) coincides with the DMA21 and should provide strong support. But E$ bulls must be patient and watch the momentum before attempting to buy the dip. For now, I placed a small probability for a deeper correction back to 1.28ish.

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Bearish (correction of recent rally)

Asian order book:
Stop loss: 1.3005/990, 1.3050/40, 1.3130 and 1.3160
Limit: 1.2980 and 1.3150

Technically, shorter intraday indicator is in the o/s zone and counter-directional consolidation is needed to unwind this condition though longer intraday is still close to o/b level. Shorter intraday oscillator is pointing to a consolidation which at current level, would suggest more upside bias. Longer intraday oscillator is still pointing higher. Expected range 1.3100/10 to 1.2970/80. Looking to sell into rally with a tight stop above yesterday's high. Another level to look to sell into is at 1.3140/60 with tight stop above 1.3180.

E$ 2-Hourly chart - 50% fibonacci ratio level at 1.2930/40 provides strong support

Parallel in my iMac gave me problem yesterday as my trading system runs only on Windows platform. Bought a Windows based Samsung all-in-one desktop just for my trading now with iMac as backup.