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

USD has run its course?

Back after a short break and here's what I see unfolding:
1. These recent months of USD bull run is probably at its tail end or already run its course.
2. Euro, the quasi-USD, may soon feel the pressure as EURxxx start to correct the recent months of bull run.
3. If a major reversal is imminent, how does that correlate with the equity markets?

CFTC COT report: Speculator accounts as of 6 Aug 13
EUR:  -  8,504 vs  + 6,061
AUD: -72,573 vs   -67,797
JPY:   -82,135 vs   -80,213
Note: EUR has finally swung into net long. A$ and USDJPY are susceptible to short squeeze and long liquidation respectively.

Europe order book:
Stop loss: 1.3285/75, 1.3425 and 1.3450
Limit: 1.3235/30, 13300, 1.3350/55, 1.3390/400, 1.3410/20 and 1.3480/85

Primary trend: Bullish
Intermediate trend: Bearish for 1.2800/50
Minor trend: Mildly bearish

Technically, shorter intraday indicators are in o/s territory which could provide support at 1.3300 for now. However to note, the longer intraday still has room and the daily/weekly indicator are still in o/b zone. The dark-cloud cover candlestick pattern on Friday and the bearish divergent signal have both increased the probability of a near term top. Expected range 1.3350/60 to 1.3230/50.

E$ 8-hourly chart - Bearish divergence in the mature stage

E$ resisting in a strong USD environment...

E$ continues to resist against the USD strength on the back of firm EURxxx, notably EURAUD. At the current level of 1.4800, I believe EURAUD still has another wave higher (potentially 1.5350/5400) to complete this recent rally before a meaningful correction. This should provide us the cyclical timing as to the reversals of both E$'s near term top and A$'s near term bottom. After this EURAUD's parabolic surge, a subsequent correction back towards 1.43/4400 is expected in the weeks' ahead.

Do note that the USD index continues to look firm and I would expect the greenback to appreciate against most currencies at least in the first half of August. With that, USDJPY should get a boost for 101.50/102.00 with strong support at 97.00/50.

CFTC COT Report: Speculator's accounts as of 23 Jul 2013
EUR:   -27,900 vs -37,165
JPY:    -87,496 vs -85,762
AUD: -63,982 vs - 70,686

Europe order book:
Stop loss: 1.3165/50, 1.3210/00, 1.3350/55, 1.3380 and 1.3420
Limit: 1.3165/50, 1.3210/00 and 1.3345/50

Primary trend: Bullish
Intermediate trend: Bearish for 1.2800/50 (to be reviewed if 1.3416 breached)
Minor trend: Range ahead of US employment data tomorrow

Technically, shorter intraday indicators have slipped into o/s level while the longer ones are only just coming off the o/b zone. This may suggest limited downside with an increased probability of overnight high being retested. Intraday momentum indicators suggest a high probability of range consolidation with an initial bearish divergent signal which is still too premature to put heavier weightage on. But do note that the daily indicator is still pointing firmly higher which should caution one against going aggressively short in the E$ just yet. Expected trading range 1.3320/30 to 1.3220/30 (on first test only).

E$ 8-hourly chart - Initial bearish divergent signal, still premature.......

AUDUSD
Last update "Are we done yet?", 24 Jul 13, I have warned of a potential bounce in A$ around 0.8870/900. However, based on current development, price remains heavy and A$ looks vulnerable for 0.8600. Strong resistance 0.9100/20 should cap any rebound for this round. At this point in time, the cyclical timing seems to coincide with the EURAUD view above. Will update if new signals emerge.

A$ 8-hourly chart - Price action remains vulnerable to the downside 

Shaken but not out!

Overnight, E$ defied gravity and continued its relentless grind higher soaking up heavy supply and triggering buy stops. The price action was unusual as I witnessed the rally last night. Despite the dark cloud cover candlestick pattern, E$ replied with a very potent turnaround with the daily range totally engulfing the day before (remember, no certainty?). For this, I must admit I was not mentally prepared for and will take a step back, let the market unfold a little further before I commit to a minor trend view.
Having said that, I still maintain that E$ remains susceptible around these levels for a very quick snap back, which has a higher probability of materializing in August.

Europe order book:
Stop loss: 1.3165/50 and 1.3305
Limit: 1.3165/50, 1.3300, 1.3320/25 and 1.3340/50

Primary trend: Bullish
Intermediate trend: Bearish for 1.2800/50 (to be reviewed if 1.3416 breached)
Minor trend: Mixed

Technically, intraday and daily indicators are all in o/b levels. However, I receive mixed signals on the intraday momentum indicator at this point in time (1.3275) with some showing further upside momentum but contradicted by a bearish divergence signal. This should hold us back from turning overly bullish in case the E$ went for another spurt towards the trendline resistances (1.3340/70) tonight.
For the diehards, I recommend a scaled down notional for a speculative sell at 1.2330 with a stop above 1.3416 for a take profit at 1.3230. Its Friday, remember your trailing profit stop!

E$ Daily chart - Trendline resistance...

Reversal pattern = Checked!!

Like it or not, for E$, most reversals were preceded by either a bullish/bearish engulfing or dark cloud cover/piercing candlestick patterns (see chart). After studying the intraday price action and confirmed by a daily dark cloud cover candlestick pattern, the probability of E$'s recent rally hitting a wall has definitely increased (nothing is certain in the financial market!) However, as we slip into the daily Ichimoku cloud, we must be mentally prepared for some back and forth price action until we break free below the 1.3100 big figure where we then have to contend with the bunch of daily moving averages (DMA200/50: 1.3079, DMA 21: 1.3047 and DMA100: 1.3027).

No updates on the order book today.

Primary trend: Bullish
Intermediate trend: Bearish for 1.2800/50
Minor trend: Mildly bearish

Technically, shorter intraday indicator has come off its o/b zone but the longer intraday and daily indicators are only just starting. Upside momentum has waned and downside momentum is building up.
Expected range 1.3230/40 to 1.3100/20 (expanded 1.3060/80).

E$ Daily chart - Reversals

Read my update "Are we done yet?", 24 Jul 13, for AUDUSD view.

Where art thou going, my precious metal?

Since my last writeup "Initial target hit, whatz next for XAUUSD?", 15 Apr 13, the yellow metal has touched my 2nd target and its time for another update.
To give all a sense of proportion and perspective, I have included a multi-year monthly chart here.
After touching a low of $1,180, XAUUSD has managed a recovery to $1,375, just shy of the pivot band at $1,390/400.

Fundamentally, XAUUSD's recent years of rally was on the back of Fed's QE, it is quite difficult to reconcile with the speculation that gold has completed its downward correction here and is due to head much higher from here when Fed is only just starting talk on tapering. Therefore, I humbly feel that this precious metal has scope for more downside and price will probably languish around the low, until maybe one day when fears of global inflation start to steal the headlines.

Technically, as long as it stays below the pivot level, probability of the yellow metal falling back to retest the recent low is high. That being said, I have observed that the recent recovery's price action has packed quite abit of momentum. As a result, there is sign of bullish convergence though its still very premature to place too much weighting on this signal. But it may give hint of a potential temporary bottom with XAUUSD going into a more elaborate consolidation between $1,200 to $1,400.
As of now, I place a higher probability of another wave lower towards $950-$1,050 to complete this cycle of correction.

Primary trend: Bearish for $950-$1,050
Intermediate trend: Range between $1,200 to $1,400

XAUUSD Monthly chart - Better perspective with a long term chart

Are we done yet?

A very potent full moon this month indeed. With one more burst in reaction to the weaker than expected German Flash Manufacturing PMI number, E$ cleared another batch of stop orders to print a high of 1.3254, which is at the top end of my intermediate term range. At this stage, I have to believe that the risk/reward should start to favour holding short E$ with the next strong resistance at 1.3360/80. Signs of a bull USD resurgent has surfaced as we scan across the spectrum of USDxxx.

Europe order book:
Stop loss: 1.3080
Limit: 1.3125/15 and 1.3390

Primary trend: Bullish
Intermediate trend: Range between 1.2800 to 1.3200/50
Minor trend: Mildly bearish

Technically, longer intraday and daily indicators are in o/b zone. Intraday momentum continues to point higher following the surge to 1.3254 though signs of bearish divergence signal has emerged. In the days ahead, E$ is expected to fall back to the bunch of technical supports ranging from 1.3020 to 1.3090. For today, trading range from 1.3250/60 to 1.3150/70 (expanded 1.3120/30).

E$ Daily chart - Top range of intermediate trend hit 

A$ has finally broken the ascending trendline (chart does not reflect) after a rejection at around the 0.9300/20 resistance level forming a triple top. This will put pressure on the pair to test pivot at 0.9150/70 before falling back to the low end of the range at 0.9000/30. Like I have mentioned before, 0.8870/900 is a level to be reckoned with and one has to hold back being overly bearish when nearer for this round.

A$ hourly chart - Resistance band around 0.9300/50 and the support trendline