Tough call....

Despite the much stronger US employment data last Friday, market failed to follow through with the selling pressure and that encouraged shortcovering taking E$ to an intraday high of 1.2898 clearing some weak buy stops along the way. Is the market still fixated with the recent USD positive development and looking to fade into any E$ rally? At the moment, short term technical signals are quite mixed and I will have to remain patient and not force a view. When in doubt, I will fall back to my intermediate trend view for guidance. For now, last heard there is a large option barrier at 1.2800 and that together with the sell stop orders at 1.2790 may become a magnet for another test there before any rebound towards the trendline support turned resistance at around 1.2930/50.

Europe order book:
Stop loss: 1.2745/40, 1.2790, 1.2845/40, 1.2900-10 and 1.2950/60
Limit: 1.2930/35

Primary trend: Bullish
Intermediate trend: Range between 1.32 to 1.24
Minor trend: Mixed to Mildly bullish (corrective)

Technically, intraday indicators have come off its o/s condition but the daily is still in o/s zone (see top chart). Momentum indicators are showing a mixed bag of signal. However, trend indicator is showing that E$ is ripe for a near term bounce. Expected trading range 1.2820/30 (1.2780/90 expanded) to 1.2930/50.

E$ Daily chart - Potential brief rebound to unwind o/s condition before lower again....

E$ Monthly chart - Down then up into Q4 

Confirmation....

In a way, Fed is vindicated from even contemplated tapering the bond buying programme sooner than expected. Evidently, with the latest overwhelming US employment data, we are now in a relatively clear cut position where US is ready to wean off from QE whereas Eurozone is still languishing with potentially negative interest rate. Any doubt on the sustainability of the recent USD resurgence will be put to rest and the investment community is probably more convinced and ready to embrace this scenario (herd instinct). A stronger corrective rebound in currencies is now delayed. Just a sidetrack..... With the current development, it will be quite difficult to believe that XAUUSD (Gold) is ripe for another bull run, at least not before another leg lower. I will be updating on XAUUSD in the coming days since the second target has been touched in "Initial target hit, whatz next for XAUUSD?", 15 Apr 13.

CFTC COT Report: Speculator's accounts as of 25 Jun 13
EUR: +17,357 vs +20,030
JPY:   -61,462 vs -61,890

Asia order book:
Stop loss: 1.2750/46, 1.2940/50 ans 1.2975/80
Limit: 1.2750/46, 1.2805/00, 1.2940/50 and 1.3040/50

Europe order book:
Stop loss: 1.2745/40, 1.2790 and 1.2930/35
Limit: No noteworthy orders

One of the very rare occasions where these noteworthy orders changed that much.

Primary trend: Bullish
Intermediate trend: Bearish for 1.2400
Minor trend: Down / Up (mildly bullish - corrective)

Technically, shorter intraday indicators have unwound from its o/s environment but longer intraday/daily are in extreme o/s territory. Shorter intraday momentum indicator is suggesting consolidation but longer intraday/daily are still pointing firmly lower. Taking other technical signals into consideration, I see spillover momentum in E$ to test briefly below 1.2800 before a rebound. Expected trading range between 1.2760/70 to 1.2860/70. Stronger support at 1.2750 and resistance at 1.2920/30.

E$ Daily chart - Last line of defence....

ECB Draghi did it again....

ECB Draghi's dovish comments dragged E$ lower overnight touching a low of 1.28828. E$ lost ground as ECB chief signalled that negative interest rate may be tolerated. This is an important development and it can have lasting effect on the E$ and its crosses. Looking at the top chart, its clear that the major trendline (black) has been broken and it is highly likely that the neckline region (1.2800/50) will be tested today though I may not get overly bearish there. Market focus is on the US Non-farm Employment Change data this evening (8:30pm, Sin/HK). Heard last night that sovereign bids were seen around 1.288ish, coupled with profit taking provided near term support. Looking at the 2nd chart, it is apparent that EURAUD could start to consolidate with a downward bias which may also indicate a USD correction. Therefore, I do see a short term recovery in A$ and N$, which could provide E$ with some support (can be quite a tricky situation).

Asia order book:
Stop loss: 1.3050-55, 1.3070-80 and 1.3100/10
Limit: 1.3040/50 and 1.3070-80

Primary trend: Bullish (Under review)
Intermediate trend: Bearish for 1.24
Minor trend: Mildly bearish for 1.2800/50

Technically, intraday to daily indicators are in o/s territory. Intraday to daily and weekly momentum indicators are all pointing to lower E$. I expect a trading range between 1.2800/30 to 1.2950. Can't get overly bearish when nearer 1.2800 and remember its Friday. Stay nimble and learn to take profit, never wrong!

E$ Daily chart - Trendline supports

E$ (Black) & EURAUD Daily chart - Breakdown in correlation but for how long? 

Watch EURAUD...

Happy Independence Day to my American friends. That will also imply sub-optimal liquidity during the Europe/NY session where ECB will make its Minimum Bid Rate announcement (7:45pm, Sin/HK) and Press Conference (8:30pm, Sin/HK).
Yesterday, E$ shortcovered as expected and it surged to a high of 1.3033 after touching a low of 1.2923. Rate has come off and currently consolidating around 1.2980/90. I have to admit that technical signals are mixed. While on one hand I see E$ testing 1.2800/50 and 1.3150/80, question here is the sequence. Looking at AUD$ (0.9105), I see a good chance of a rebound into 0.93ish and EURAUD (1.4265) falling back to test 1.40ish. For your information, for EURAUD to fall, the likelihood is for AUD$ to stay firmer, at least for this round. The bullish convergence in E$ continues to warn the bears, while the daily and weekly momentum indicators continue to point to lower rates. Looking at the order book, market does look like its caught short for now.

With this mixed view, I shall present a couple of scenarios here in order of probability:
Scenario 1: E$ holds 1.2923 and rally for 1.3150/80 before turning lower again for 1.2800/50.
Scenario 2: E$ drops on ECB' dovish comments to 1.2800/50 before rallying sharply for 1.3150/80 in the days ahead.

Europe order book:
Stop loss: 1.2905/00, 1.2930/20, 1.3050-55, 1.3070-80, 1.3100/10 and 1.3120
Limit: 1.2905/00, 1.2930/20, 1.3040/50 and 1.3070-80

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.33
Minor trend: Mixed

E$ 4-Hourly chart - Bullish convergence keep bears cautious...

Trendlines the magnet....

Negative fundamentals emanating from Greece and Portugal helped the market decide after several days of consolidation between the daily Ichimoku cloud (1.2990/3000) and the bunch of MAs (1.3055-85). Admittedly, I was hoping to see E$ move higher before I fade into that rally targeting the lower band of the intermediate trend range. Now that E$ has broken out of the consolidation, near term picture remains bearish for the trendlines from around 1.2860 to 1.2800 (see chart). But before one jumps onto the bandwagon, watch the o/s signal and take advantage for better entry level.

Europe order book:
Stop loss: 1.2905/00, 1.3070-80 and 1.3100/10
Limit: 1.3055 (opt) and 1.3070-80

Primary trend: Bullish
Intermediate trend: Range from 1.28 to 1.34
Minor trend: Bearish for 1.2800/50

Technically, intraday indicators have all gone into o/s level and current rebound is unwinding that extreme condition. At this moment, various intraday momentum indicators are showing mixed signals but the daily and weekly ones are pointing lower. This may suggest an intraday shortcovering from here before E$ retest today's low of 1.29235 either today or tomorrow. Top of daily Ichimoku cloud stands at 1.2995 and DMA100 at 1.3050 are the formidable resistance. Only a daily close above 1.3090/3100 can relieve the near term bearish pressure.

E$ 8-Hourly chart - Daily MAs won and trendlines targets for now but.... 

Slight upside bias..... (Update 1)

E$ continues to be trapped between the strong support at 1.3000 and the bunch of daily MAs ranging from 1.3055 to 1.3085. However, I foresee a breakout within 24hrs. This week will be a bit trickier to "feel" the cycle as US celebrates Independence Day on Thursday and then followed by the important US Change in Non-farm Payroll numbers. In the meantime, it does seem like market is caught slightly short and the buy stops may end up being the more attractive target for this round.

Europe order book: (Updated in italic and underlined)
Stop loss: 1.2980-70, 1.3015/10, 1.3075-80 and 1.3100/10
Limit: 1.2960/50, 1.2985/90 and 1.3075-80

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mildly bullish for 1.3170/90 (1.3220/50 expanded)

Technically, shorter intraday indicators have moved into o/b level but the longer ones are above the 50% but still off the o/b zone yet. Intraday momentum indicators have turned from consolidation to an upside bias which has increased the probability of a break to the upside. First important resistance is at 1.3100/05, clearing which exposes 1.3140/50, 1.3170/90 and then 1.3220/50. Yes, quite abit of headwind and be forewarned not to get overly bullish when nearer 1.3200 and do tread with caution. For today, 1.3030/50 to hold for now.

Update1: Europe order book has been updated. Last heard Asian sovereign sales above 1.3070. Still a tough call to go long until at least a close above the daily MAs. But by then, there is not really alot of mileage left. Would already be looking for sell opportunity when nearer 1.3200. Therefore, unless infront of the screen, it will be more of a momentum buying on break of 1.3100 for a quick run for 1.3140/50. Has to stay nimble.

E$ 8-Hourly chart - Short term bottom at 1.3000 should trigger a mild rebound

Still below daily MAs....

E$ only managed 1.31029 high before falling all the way back briefly below 1.3000 and then closed at 1.3007 on the last day of the 1H 2013, where the high this year has so far been 1.37108 and low 1.27447. Admittedly, I never saw the sell-off coming but am already happy having caught the initial move up.  Today, we started the 2H just above the 1.3000 level and have so far tested up to 1.3053. In view of E$ closing below the bunch of daily MAs (MA100 - 1.3059, MA200 - 1.3075, MA50 - 1.3085), one has to admit that the bears have an upper hand for now. Market's main focus will obviously be the US Change in Non-farm Payroll number this coming Friday.

CFTC COT report (Speculator accounts): As of 25 Jun 2013
Eur: +17,357 vs +20,030
Jpy:  -61,462 vs  -61,890

Europe order book:
Stop loss: 1.2985/80 and 1.3120
Limit: 1.2960/50 and 1.3060-80

Primary trend: Bullish
Intermediate trend: Range between 1.28 to 1.34
Minor trend: Mixed

Technically, shorter intraday indicator is in the o/b territory but longer intraday is still coming out of the o/s zone. Do note that the daily indicator is still in the o/s level. Intraday momentum is suggesting range consolidation for now. Frankly, I struggle to put together a view for today and when this happens, it will be a low probability call. The range of least resistance/support is 1.3000 to 1.3050 and expanded range 1.2970/80 to 1.3070/80.

E$ Daily chart - Bunch daily MAs still a threat to E$ bulls