E$ to slip into USD mode.....

TGIF folks!!

In less than 24 hours (Sin), market will close the month of Jun, Q2 and H1 of 2012. Where we close can tell a story for the next half of the year, so it can be crucial.

Fundamentals..... EU Summit started with a managed expectation that nothing substantial will come out of this meeting and that sent the E$ reeling to the low of 1.2407.
What can be worse now? Clearly E$ has built in quite abit of negatives and still standing at 1.243ish. It may take another blow down to 1.238ish but anything else is surprise on the upside. Latest in the market was that Merkel is starting to warm up to the idea of the the Eurobond.... could this be the trigger? Let's watch.....


On the stop loss orders, this is not the latest information but here are where they reside from yesterday's session: 1.2550, 1.2400, 1.2390 and 1.2350.


Technically.... its really been a mixed bag based on just E$ alone and I need to seek help by looking at the EURxxx and precious metals once again. On E$ itself, momentum on the short to longer term is mixed but with a slight skew towards consolidation to up. Longer term indicator showing o/s but not at extreme yet and signs of mild bullish divergence. EURxxx however are consistent in that there is stronger bullish divergence signal across the main crosses. With that, the probability of E$ nearing a short term bottom is higher. A close today above the price line (see chart) will be E$ supportive for the days ahead. However, important to note that a rally in EURxxx is a risk off bet and more likely commodity related will now be the victim of bashing or it has already started..... (in a risk off environment, E$ will then slip into the USD mode).


Having weighed all the knowns, I maintain my buy dip strategy... 1.2380/400 to hold (1.2340/50 news induced) and 1.2550 to cap for now.

E$ Daily chart

All the best and my next update will be 8 Jul 2012.

Opposite direction....

Good day friends!

The much anticipated event of the week is finally here and what is there is store for us?
Overnight, low was 1.2445 and market is in the process of short covering ahead of the EU Summit. High so far had been 1.2524.

The latest stop loss update revealed the following: 1.2600, 1.2550, 1.2425 and 1.2400.

On the technical front, the longer term momentum have turned to consolidation to up. However, shorter term indicator is at o/b territory though not extreme.
Basing on the above, I believe market should start to get suck back into the range of 1.2450 to 1.2530 for now. But what is more significant is the baseline is now risen from 1.2340/50 to 1.2390/400 and the  probability of the retesting the recent low of 1.2288 is lower. The higher band of 1.2560/600 to 1.2650.

Scalpers, be warned that for today and tomorrow, market will be exposed to more random news impacting the price action which will overwhelm technicals. I prefer to position my entry nearer the boundaries for a better risk/reward payout. In the same vein, it is favouring a buy dips strategy for today.

Just remember, whatever you do, always have your stop in place..... even before you leave your desk for a toilet break!

E$ Daily chart

All the best!

Bull within bear.....

Good morning folks!!

Had a great field day?

Fundamentals.... Merkel fell victim to intentional misinterpretation of her comment as market searched for any excuse to gain momentum to sell the E$ for stops. It seems like E$ is happy to head into the EU Summit this Thursday with the mindset that nothing substantial will come out of this meeting.... that is doubting the EU leaders' resolve from past experience? But this will put E$ in very vulnerable position to sharp short squeezes if any positive news were to come out of it.....

For the past 2 days, stop loss orders were skewed to mainly sell stops only. However, information received this morning revealed a relatively more balanced picture.
They are lurking at 1.2600, 1.2550, 1.2442/35/30, 1.2425 and 1.2410.

Technically, it has become more of a mixed bag of information. Shorter term momentum has turned to consolidation to up, whereas the longer term is still pointing lower. Longer term indicators is showing E$ in o/s territory but not extreme at all. Shorter term tech is showing mild bullish divergence.
Lastly, E$ has traded to familiar territory (see chart). I have drawn a line to show that the recent days, market has somehow muscle its way to consistently close E$ above 1.2480 as shown by the shadows of the candlesticks (as circled).

Having analysed the above and also taken into consideration that Friday will mark the last trading day for the month of June, here's my prognosis.....

While I maintain my bearish weekly view, I am mentally prepared for a potential short squeeze ahead of the EU Summit as some readings from the technical indicators have increased the probability of a mini bull within the bigger bear. On wide, I see 1.2340/50 to 1.2560-600 by Friday. I prefer to sell into rallies for positioning and guerilla scalping on the long side. In other words, if I am long E$, I will be desk bound but if I held a short position at strategic level, I can be found at the driving range :)
For today, 1.2450 to hold (1.2400 news induced) and 1.2550/60 to cap.

E$ Daily chart

All the best!!

The pain in Spain.....

Good morning friends!!

Fundamentals.......

* Moody's downgraded 28 Spanish banks and 2 issuer ratings by 1 to 4 notches (E$ did not really react!!)

* CFTC net speculators revealed that E$ net short stands at -141,066 (19 Jun), down sharply from -195,187 (12 Jun) and from the record level -214,418 (5 Jun).

* Stop loss orders can be found at 1.2470 and 1.2442-35.

After almost a full day of consolidation, short and longer term o/s condition has been unwound but still not into the o/b zone yet. Looking at the price actions, it appears that we may be in for further consolidation with a slight upside bias to retest the 21 DMA which is at 1.2532 today and possibly further short squeeze into 1.2550/60.

Today will be light on economic data releases and market will mark time for the EU Summit starting on Thursday.

It will be a lower percentage call today but if anything, I will await to sell E$ on rally as I maintain my bearish bias for the week. 

1.2480/70 to hold for now (1.2430/20 stronger support).

E$ Daily chart

All the best!

E$ underperformed expectation....

Hope all had a great weekend and I look forward to another exciting week before I fly away this coming Saturday for a mission trip and will be back on the 6th July.

Meantime, I have taken profit on my long E$ and A$ on Friday night and will stay aside for now since the currencies did not close as firm as I hoped to see. I will be monitoring XAU$ (closed firmer on Friday) and EURAUD for correlation.

E$ Daily chart

Update1: Indeed the weak close last week was the strongest message that the bulls were in trouble. I would have to scale back on my weekly bullishness of the E$, now that it has broken below the daily 21MA. Market has turned its focus to the EU Summit starting this Thursday.

Technically, short and longer term momentum are all pointing down but it has gone into o/s territory for now and we should see sideways consolidation to unwind the oversold condition before further selling kicks in. E$ looks vulnerable and may potentially fall towards 1.2340 quickly and I am even mentally prepared for a retest of recent low of 1.2288 in the days ahead.

It will take E$ to close above 1.2600 to invalidate the bearish view.

Immediate resistance stands at 1.2510/20 and stronger at 1.2550/60. All the best!

Opportunities or bloodbath?

Good morning folks, its Friday!!!

Hope you have monetized last night's move rather than calling it a bloodbath.

Short and sharp for today..... China is out, most of the sell stops were flushed, which leaves us with only buy stops lining from various levels from 1.2600 to above 1.274ish. Liquidity will be sub-optimal during the Asian session. 2 things can happen, moves can be exaggerated and gappy or it can be sleepy. My gut feel is that market will take this opportunity to eat the lower hanging fruits first and will await Ldn/NY session to push higher to close the week firm i.e. between 1.2650 to 1.2700.

In line with yesterday's expectation, 1.2530/40 to hold and 1.2680/700 to cap for now.

E$ Daily chart

All the best and have a great weekend ahead!

Buy rumor, sell fact?

Good morning friends!

So the market got what they wanted from the FOMC? seems like 1.274ish resistance is a hard nut to crack. The harder it gets, the more stops will accumulate above over time. We shall wait and see for now.

Last night was the second time in recent weeks that I woke up in the middle of the night to discover my order filled and market had rallied, peaked, missed my take profit level and turned back down. This time I bought my E$ at the day's ultimate low of 1.2638 but my t/p was at 1.2768, high was 1.2743 (a cool 100 pips in a matter of minutes!!!). By the time I woke up and logged in, market was trading down to 1.267ish where I covered my position. I was not expecting anything, so that was bonus!

Back to the market..... a few factors are warning me against getting too bullish at current levels:

• double top at 1.274ish
• short and longer term momentum are turning down
• overbought condition
• mild signs of bearish divergence
• stops at 1.2550/40 are still there

Despite the above, I am aware that if I went short, I am going against the trend and I must monitor the market very closely. So it will be scalp for short, position for long today.

Its downside bias for E$ today but be careful of sharp rebound. I see 1.2540/30 to hold and 1.2720/30 to cap.

E$ Chart

All the best!