E$ was rejected once again at 1.3380/90 yesterday and price action suggest that we should be range trapped between that resistance to 1.3250/70 for now. Being a technical trader, I can imagine stop loss orders being build up on either side just outside the range in the coming days before the breakout, potentially Thursday or Friday.
A couple of observations:
1. E$ once again closed 6 consecutive days above 1.3300 yesterday (closed at 1.3320) - underlying Bullish signal
2. Based on the close at 1.3320 yesterday, it just barely fulfilled a bearish piercing pattern against Friday's price range - Daily Bearish signal
Confused?... in a nutshell, market is telling us that underlying strength in E$ is firm but for today, we probably see downside bias.
At this moment, I am mentally prepared that once the breakout comes, it may break on the downside first to flush the sell stops all the way to probably 1.3200 before turning back up to break 1.3390/420 where loads of buy stops are building up now.
For today, CNY Non-Manufacturing PMI at 9:00am and RBA rate decision at 12:30pm should inject some life (but don't hold your breath). Chinese is still out till Thursday. Expect tighter range 1.3360/70 to 1.3280/90 (1.3240/50 news induced). (5.5/10)
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