Directionless......

Happy birthday Singapore!

Good morning folks, today we celebrate our nation's 47th birthday, a relatively young country, huh.

Reports that Italian Prime Minister Monti is facing pressure to reject a bailout was the only meaningful eurozone related news and that was probably the only reason to send the E$ lower, albeit in a controlled manner.

Stop loss orders were cleared at 1.2370 and 1.2342 and from yesterday's update, those at 1.2450 is still around.

Technically, shorter intraday indicator is nearing o/b levels, though longer term ones still have room for further upside. Momentum has turned flat and suggest further consolidation for now with risk of an eventual breakout within the next 48hrs. Having fallen to the low of 1.2327 yesterday has already achieved my first target of the correction lower. But that was only the 38.2% target, the 50% and 61.8% being 1.2288 and 1.2252 respectively. However, I have a mixed bag of signals now which is making today's call quite tough. Having considered all available information, I prefer to eventually trade on the long side, but its just a matter of level. I have to admit that if I have to force a view today, it will be a low percentage call. Will just have to monitor the movement and trade accordingly as signals evolve.
For today, strong support at 1.2250/70 and initial resistance at 1.2450/60, stronger at 1.2520/30.

E$ 2hourly chart - Pattern repetition?

All the best... whatever you do, place a stop loss order.

Gravity rules....

Good Wednesday morning, folks!!

A pretty well behaved market throughout the whole session with an upside bias as expected. Clearly, the strong offer at 1.2445 has managed to thwart E$'s attempt at the option barrier and stop loss orders at 1.2450 for now and that encouraged E$ to turn south to seek the path of least resistance. However, market was again faced with decent bids ahead of 1.2400 as this market player was defending an option just prior to expiry.

Stop loss orders are very light on both ends with only 1.2450 and 1.2370 highlighted.

Technically, intraday indicators have slipped into o/s levels and coupled with signs of mild bullish divergence, it has increased the probability of a near term bottom and rebound. As a result of the consolidation within a tight range, longer term intraday momentum is starting to turn from a mildly bullish tone to consolidation. On a daily basis, E$'s inability to close above the MA50 also indicate relative weakness. Closing 'doji' would warn of potential volatility. To summarize, probability has increased for E$ to correct lower today but bearing in mind that I am on a weekly basis, still bullish. Therefore, I maintain my strategy to scalp on short again and position for long.
For today, 1.2410/20 provide first resistance with stronger at 1.2460/80 and support at 1.2320/30 and stronger at 1.2260/80.

E$ Fibonacci Retracement levels

All the best, remember to stay nimble on your shorts!  :)

Consolidation to go on....

Good morning, folks!!

A pretty boring session yesterday if you had missed the early rally to 1.2443 as market consolidates gains from Friday. Hopefully, we get some stimulant from the RBA's rate decision at 12.30pm later.

Last I heard on the stop loss orders were only those residing at 1.2450.

Technically, shorter term intraday indicator has moved to neutral but the longer intraday is still in the o/b level, which suggest a correction lower is needed to unwind and it is also healthier to form a base before the next leg higher. Shorter term momentum has turned to neutral and consolidation but longer term ones are suggesting consolidation to up. To summarize, for today, I am expecting E$ to consolidate further and trade lower first but with a risk of a spike towards 1.2460/70. No change in the strategy from yesterday. If E$ rallies again (provided 1.2300/20 is not seen first), 1.2460/80 should provide good resistance on first test. For those who are more comfortable riding the trend, then look to buy dips. Breaking 1.2134 will invalidate short term bullish view.
For today, 1.2290/310 to hold (1.2250/30 stronger support) and 1.2460/80 initial resistance and stronger at 1.2540/50.

E$ 4hourly chart - Fibonacci levels

All the best, I will be putting in a sell order (of course with stop) and will be going for 9 holes now. Will be back for Europe session.

Bull behind the steering wheel.....

Good Monday morning, folks!!

For those who were never convinced of the full moon effect, I hope last Thursday and Friday's price actions would have gained a little of your respect  :)

Friday saw market short covered ahead of the weekend so-called troika meeting. Of course, when it concluded on Sunday, this was what you can take away from the joint statement by the EC, ECB and IMF... "The discussions on the implementation of the program were productive and there was overall agreement on the need to strengthen policy efforts to achieve its objectives." Ok, whatever positivity you can squeeze out of that statement but as usual they will be returning to Athens in early September to continue the discussions... anything new? However, the reassurance from Italian PM Mario Monti that Italy does not plan to seek financial aid from its Eurozone peers was the impetus for E$ to push through resistance at 1.2400. Another factor for E$'s bullishness is probably because market is refocusing on US QE3 now.

Latest CFTC speculative accounts again trimmed their net euro short position to -138,994 from -155,066.

A quick recall on the Elliot wave count (read from 31 July).... the corrective 'C' wave actually ended at 1.2134 on early Friday morning and the new impulsive wave is unfolding and this put 1.2700 in the radar.

Technically, intraday to daily indicators have shot itself into o/b level and it seemed like a consolidation at this stage is required to unwind that condition. Intraday to daily momentum have turned up with the weekly turning from down to neutral, whereas the monthly continues to be pointing lower. That being said, the probability of higher E$ in the coming days has increased substantially. However, at this stage I identified 2 way opportunities depending on your risk appetite. If E$ rallies again, before Europe comes in (provided 1.2300/20 is not seen first), then I believe at 1.2460/80 region provides good resistance for this round to fade into (against trend). If not, I will be looking to buy into dips.
For today, 1.2300/20 to hold (1.2250/30 news induced) and 1.2460/80 initial resistance and stronger at 1.2540/50.

All the best and have a great week ahead!!

Draghi's Drag.....

TGIF folks!!!

"It is pointless to bet against the euro, its pointless to go short on the euro because its here to stay and its irreversible", so says Draghi but not my bank account!  :)  

So did you witness and experience the full moon effect last evening? This is one great example of the kind of volatility one should be mentally prepared for.... smacked on the exact day itself. Not enough of action? we still have the US employment numbers tonight though I do not foresee a move of the same magnitude.

Let's recall the sequence of events..... E$ stayed firm throughout the session into ECB's rate announcement and reached 1.2300 on buying around the ECB fixing. It pushed further to 1.2330 ahead of Draghi press conference. E$ then spiked to touch 1.2406 high as Draghi hinted at bond buying. But on further analysis, market became uncomfortable with the "may buy" and very quickly sellers emerged and sold the E$ big time as it slid to 1.2173 within 30 minutes! Clearly, the pair was gunning for stop loss orders at 1.2180 and 1.2170. E$ subsequently hit the low of 1.2133 before it consolidates for the rest of the night.

On the stop loss orders, no updates yet as all were flushed yesterday. But it was really useful to learn that buy stop orders were lurking at 1.2310 and 1.2350 by late afternoon before the ECB announcement. That actually had me thinking if we may see a deeper 'B' wave and revert to Wednesday's resistance levels ('Mark time for FOMC', 1Aug). In detail, from 1.2390-1.2227-1.2336-1.2218 actually formed a-b-c (A wave) and a-b-c-d-e (Irregular B wave) and then from 1.2406-? (C wave).

Technically, we probably have seemed the completion of the 3rd wave of the 'C' and in the process of 4th before another dip for 5th wave to complete the corrective 'C' wave. Intraday indicators are in o/s levels though not extreme but this consolidation should unwind a little. Shorter intraday day momentum is still pointing lower but longer intraday ones are still suggesting range consolidation between 1.2050 to 1.2370 now. There are signs of mild bullish divergence and that probably reinforced the view that we are nearing a bottom from yesterday's sell-off. That being said, I must warned that I still have mixed signals because my weekly and monthly momentum indicator is still pointing firmly lower.
In short, risk/reward favors buying dips (provided 1.2220/30 is not seen first). 1.2100/10 to hold (1.2060/80 stronger support with 1.2042 being recent low) and 1.2220/30 first resistance and stronger at 1.2360/70. A break and close below 1.2042 would suggest a continuation of the bearish trend.

E$ 15min chart - Full moon effect

Apologies if I had it a little too technical today but just want to share my Elliot wave count with friends who can relate. All the best, stay nimble and have a great weekend.

Now what's next?....

Good morning, folks!

Market completed the counter directional 'B' wave at 1.2336 yesterday (read Month End + Full Moon = ? on 31Jul Tue) and started the impulsive 'C' wave down in reaction to the FOMC decision. Fed left rates unchanged and signal that they want to keep it exceptionally low through end 2014. Frankly, I thought there was a repeated hint of QE3 but market has chosen to buy the USD for now. Let's see what ECB has for us this evening......

By the way, if you are wondering why I was showing the monthly chart for the past 2 days.... its because I want to remind ourselves that E$ has broken a 10year trend line and last month price was rejected on retest. Nothing is guaranteed by a single signal but it has increased the probability of further weakness to challenge the previous low of 1.1875. For all you know, the rebound may come right after that  :)

No updates on the latest stop loss orders just yet but based on what I had yesterday, those at 1.2305 and 1.2225/20 have been cleared and we are left with the sell stops at 1.2180/70.

Technically, intraday indicators are at o/s levels and coupled with its inability to break the support zone of 1.2200/20, it has increased the probability of a consolidation with an upside bias from here to unwind. Supporting that view, though a little premature, the intraday momentum has shown early signs of recovery. Daily momentum continues to suggest range consolidation between 1.2100-1.2400 for now. However, with a daily bearish engulfing pattern formed yesterday reinforced by E$'s inability to hold above 1.2300, the probability of E$ probing into the lower end of the range has increased overnight. Therefore, risk/reward favors fading into rallies for today.
For today, 1.2270/80 to cap (1.2320/30 news induced) and 1.2120/00 to hold (1.2080/70 news induced).

E$ Monthly chart

All the best!!

Mark time for FOMC....

Good morning everyone, its August already and F1 will soon be round the corner. The first and only night race (for now). It gets me all excited especially when you see the start of the preparation with all the barricades and flood lamps lining the road circuit.

Mid-week and a new month but guess market has decided to only spring into action probably post the FOMC rate decision and statement in the wee hours of Thursday.

Stop loss orders remain at exactly the same levels despite the 1.2305 being cleared yesterday. Sell stops are still lurking at 1.2225/20 and 1.2180/70.

Technically, daily momentum continues to point to further consolidation and seems like a precursor to a subsequent powerful breakout. 1.2400/20 remains an important level as a convincing break and close above will signal more ambitious gains to retest previous high of 1.2747. But for now, I maintain 60/40 probability for E$ to fall back into the 1.2080/40 area. Past 24hrs price action suggest strong support in the 1.2240/60 region and a base seems to have formed for E$ to be propelled higher to test 1.2400/20 but I do not foresee that level being taken out on the first test.

So to summarize, 1.2240/60 to hold (1.2200/20 news induced) and 1.2360/70 to hold on first test (stronger resistance at 1.2400/20).

E$ Monthly chart

All the best!