Major risk event to overwhelm....

E$ managed to hit a high of 1.3243 before profit-taking set in and pressure the pair lower during the NY session. Expectations of a 25bp rate cut by ECB (7:45 / 8:30pm Sin/HK) continue to cap any advance. This is an important risk event and it will overwhelm technical analysis. But considering the price actions where E$ rallied past 1.32012 despite the negative sentiment overhanging the market since Monday, I will try to come up with a couple of scenarios to better prepare ourselves mentally.

Scenario 1: ECB fails to cut or cuts 25bps.....
Knee-jerk reaction to take us back to test 1.3200/20 before sell-off to 1.3040/60 as market would believe the probability of a cut in the subsequent meeting will become even higher. Can't get overly bearish there as I expect a rebound after that. Note that 1.2960/80 is a much stronger support level.

Scenario 2: ECB cuts 50bps.....
This is a shocker and E$ could plummet as deep as 1.2960/80 by tomorrow but I expect a subsequent rebound.

European order book:
Stop loss: 1.3130/20 and 1.3240/60
Limit: 1.3030/10

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Vulnerable to long liquidation to flush downside after recent rally before higher again.

Technically, all intraday signals will not be relevant on a major risk event like today. I'll react accordingly to how the market unfolds having the above 2 scenarios and the intermediate trend as guide.

E$ 4-hourly chart - A dip before higher?

Easy money is over for now....

Easy money for this rally is nearing the end and expect market to profit take ahead of FOMC rate decision and statements.

Risk events this week include:
Wednesday's FOMC rate decision and statement (2 May, Thu 2am Sin/HK)
Thursday's ECB rate decision (7:45pm Sin/HK) and Press Conference (8:30pm Sin/HK)
Friday's US employment numbers (8:30pm Sin/HK)

CFTC COT report (positions as of 23 Apr 13):
Euro:  -34,275 vs -29,764
Jpy:    -79,730 vs -93,411

NY order book:
Stop loss: 1.3130/20
Limit: 1.3030/10, 1.3055/50 and 1.3130/20

Primary trend: Bullish
Intermediate trend: Bullish (1.32012 breached)
Minor trend: Can't get overly bullish around 1.3260/70, expect consolidative price action

Technically, intraday indicators are all in o/b zone though not in extreme. Shorter intraday momentum is suggesting a near term top but longer intraday momentum is still pointing firmly higher. These contradicting signals may not indicate a turning point but it serve as a warning against getting aggressively bullish. For today, I see 1.3260/70 to cap for now with 1.3160/70 to hold on the downside.

E$ Daily chart - 50% fibo target reached

Regular update will resume in the afternoon tomorrow.

E$ caught short once again....

Choppy price actions continue to plague the market as we move into the final trading day within the full moon zone. Market was caught short with the ECB rate cut anticipation but right after a series of buy stops were flushed (intraday high: 1.3094), stop loss hungry hunters turned around and sold the E$ down to 1.2988 on the back of the same story.
Following the steep overnight sell-off, market could have once again be caught short the E$. Based on the available information in the order books and technical resistance/support, the path of least resistance could be up with possible clusters of buy stops residing just above. The stop order at 1.2950 though tempting, has to content with real money and reserve managers' buy orders from 1.2950 to 1.2980.

In hindsight, knowing it was full moon zone, I should have just shared my forecast on that remote possibility of E$ falling back to 1.2990 yesterday..... it materialized!!!
Scenario 1:
E$ to hold 1.2980/90 and rally to touch 1.3130/40 before easing to close the week below 1.3100.

Scenario 2:
E$ to hold 1.2980/90 and consolidate within 1.3000 to 1.3050/70 with choppy price action.

Asia order book:
Stop loss: 1.2950/40, 1.3060/70 and 1.3115/30
Limit: 1.2980-50, 1.3060/70 and 1.3115/30

Primary trend: Bullish
Intermediate trend: Bearish
Minor trend: Upside bias from current level (see above scenarios)

Technically, shorter intraday indicators are in o/s level (not extreme) with the longer intraday just coming out of the o/s condition with lots of room on the upside. Intraday oscillator indicators are all pointing to consolidation within 1.2980/90 to 1.3050/70. As I type, E$ is already shortcovering. Will update later.

E$ 4-hourly chart - Technical sign of uncertainty at current level

Asian sovereign interest to dominate....

E$ reacted as in Scenario 1 (German Ifo to stimulate...., 24 Apr Wed) but with a low of 1.2954 before the rebound. High so far has been 1.3061 with the offer at 1.3065 capping any advance. Market chatter that a sovereign name is at the offer.
Just picked up reports that the S.Korean and Thai central banks have been active intervention USD buyers against their own currencies and these USD could well roll into E$ recycling demand later in the day.
US weekly jobless claims at 8.30pm (Sin/HK) should be closely watched in a relatively light economic data day.

Asian order book:
Stop loss: 1.2950/40, 1.3005/00 and 1.3070
Limit: 1.3065

Primary trend (> 3mths): Bullish (View negated if 1.20426 breached)
Intermediate trend (2wks - 3mths): Bearish for possibly 1.2850/70 (View negated if 1.32012 breached)
Minor trend (< 1wk): Bullish for 1.313/40 (View negated 1.29534 breached)

Technically, shorter intraday indicators are in the o/b zone though not extreme whereas the longer intraday still has more room. Intraday upward momentum remains strong and 1.3050 is the pivot where it can open E$ up to 1.3130/40. Currently, 1.3030 is providing support with stronger at 1.2990. Next level of resistance stands at 1.3075/85 and 1.3130/40. For those who were still long on yesterday's recommendation, don't forget your trailing stop.

E$ Daily chart - Early phase of the counter-directional correction

German Ifo to stimulate....

Full moon effect came early indeed as evident in the price actions since yesterday (the erroneous tweet included). Overnight, there were signs of a USD resurgence across the board and one has to take note of its indirect impact via the EURxxx on E$ in the coming days.
The German Ifo Business Climate number today will be very important as it can steer market's expectation of a possible rate cut by ECB comes next week.

Since we are in the full moon zone, I dare to put out 2 possible scenarios in anticipation of the economic data at 4pm (Sin/HK).
Scenario 1: Weaker than expected
E$ capped below 1.3030 and fall towards 1.2930/40 before a sharp reversal for possibly 1.3140/60 in the days ahead.
Scenario 2: Stronger than expected or within expectation
E$ holds 1.2960/70 and rally for 1.3140/60 in the days ahead.

Asia order book:
Stop loss: 1.2950/40, 1.2970/62 and 1.3130
Limit: No noteworthy orders

I have revamped this part here as I re-calibrated the time period to better define the respective trend.
Primary trend (> 3 mths): Bullish (View negated if 1.20426 breached)
Intermediate trend (2 wks to 3 mths): Bearish for possibly 1.2850/70 (View negated if 1.37106 breached)
Minor trend (< 1 wk): Bullish (Limited downside to 1.2930/40. Susceptible to short squeeze)

Technically, intraday indicators are close to o/s condition though not extreme. Shorter intraday oscillator indicator is suggesting consolidation which at current level would mean more upside bias. Longer intraday oscillator indicators are still pointing lower for now. Based on the event risk this afternoon, it will be prudent to react accordingly based on the 2 possible scenarios.

E$ Daily chart - Possible scenario

Full moon comes early!!

After spending yesterday within the inner band, E$ broke out into the expanded range, ref "Not time yet....", (22 Apr Mon). Choppy price action normally characteristic when within the full moon zone (starting tomorrow) is already happening today. Stronger French Flash Manufacturing PMI number took E$ to the day's high of 1.30838 and half an hour later, the weak German Flash Manufacturing PMI sent E$ reeling to the day's low so far at 1.2973. The reported large sell stop below 1.2970 seems to be the magnet for now but like what I mentioned yesterday, I am sceptical and not too sure if its trying to draw in more sellers for the "buyer" to accumulate. If this level holds and rebound above 1.3000 in the next 3 hours or so, the probability for a move back to 1.3040/50 will be high. However, if 1.2960/70 goes, we may see a quick drop to the next strong support at 1.2920/30 (61.8% fibo ratio). Either way, I can't get too bearish around current level.

Europe order book:
Stop loss: 1.2950/40, 1.2970 and 1.3130
Limit: 1.3195/00

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Bullish (but must await technical confirmation)

Technically, intraday indicators have all slipped into o/s territory though not extreme yet. With the sharp sell-off earlier, intraday oscillator indicators are all pointing firmly lower. Currently, market is supported by the DMA21 (red) which happened to be the 50% fibonacci retracement level. Expect consolidation between 1.2970 to 1.3010 for now. Probability for another test on the downside is high as long as the momentum indicators are pointing down. For me, I will stay patient for the next 2/3hrs for confirmation of changing momentum or take at chance to buy if E$ falls through to 1.2920/30 with a tight stop and take profit around 1.3030/40.

E$ Daily chart - Touched 50% fibo ratio

E$ Daily chart - Finding support at the DMA21 (red)

Not time yet.....

As expected, E$'s Friday price action remained very choppy lacking direction ahead of the G20 weekend after being rejected close to the 61.8% retracement level. When silence means consent, USDJPY gapped up during the opening hours with E$ following suit. But the E$ gap was subsequently closed with market trading within a tight range for now. Amid the quiet environment, there are chatters in the market that sovereign and semi-official interests are lurking around 1.3000 and that should discourage aggressive selling when closer to that level. There is also mention of a large stop loss order around the vicinity of 1.2970/80 but I remain very sceptical. Smells more like a venus trap than anything else.
Do note that we will be trading into the full moon zone starting from Wednesday. As of now, I do not have any information of any major risk event/s during that period except for Wednesday's German Ifo Business Climate number due out at 4:00pm (Sin/HK).  

CFTC COT report: Speculator accounts showed a net euro short position of -29,764 vs -50,858. Spec accounts had a net yen short of -93,411 vs -77,697. Since July 2007, the largest net yen short was at -94,401 contracts which we are very close to now.

Asian order book:
Stop Loss: 1.2970, 1.3000 and 1.3125/35
Limit: 1.2990 and 1.3000

Primary trend: Bullish
Intermediate trend: Bullish
Minor trend: Mixed (consolidation mode with no breakout in sight for now)

Technically, shorter intraday indicators are in neutral zone while the longer intraday ones are just turning up from o/s levels. Intraday oscillator indicators are gradually converging to suggest further range consolidation but still premature of a breakout at this point in time. Expected inner band range within 1.3000/20 to 1.3100/20 with expanded band 1.2960/80 to 1.3140/60. Clearly market is drifting around the neutral zone and as far as my trading philosophy is concerned, getting in now is as good a probability as tossing a coin. To be honest, there is no opportunity for good R/R payout today. Trading strategy has to switch to very short term momentum pips scalping when nearer band extremes.
When there is no clarity with minor trend, fall back on the intermediate.

E$ 2-hourly chart - Rejected at 61.8% correction level

Maintenance of the fibre optic infrastructure in my area kept me away from market last Friday.