We are currently seeing a poor start for financial markets this week following development in Greece Friday. At this point we view the single currency as the most vulnerable of the majors focusing on shorts for the pair though we suggest people stay out of EURJPY given the weak-weak currency combination.
After Friday’s high wave spinning top we have GBPUSD easing off though prices are in the middle of last weeks range play. Among the indicators daily macd is technically bearish while stochastic has seen a new bear cross. Intraday we are seeing more bear signals with the 4H macd topping off and stochastic dropping while hourly indicators are even more bearish with stochastic oversold as macd drops. Given that we are inside a wide ranging market preference is for shorts from under the resistances though shorts may also be taken at the break of the support at 1.6186.
We are already seeing an early follow through to the sharp sell-off from Friday, with daily macd’s dropping and stochastic pushing to oversold levels. Note we opened the week under previous support levels with intraday indicators suggesting further losses. From the 4H picture we have macd’s dropping and stochastic pushing further into oversold levels. Hourly indicators are similarly bearish though stochastic is at risk of coming out of oversold levels. Consider shorts from just under 1.2424 with stops at 1.2450 for a test of the 1.2295 region.
We find ourselves with a pattern of lower lows and lower highs though this seems to be part of a descending wedge. Daily indicators show macd’s dropping while stochastic has a new bear cross. Note Friday’s candle is a high wave spinning top. From the intraday picture we see a confluence of bears from the 4H and hourly macd and stochastic. For now consider shorts from just under 1.0651 or on a break of the 1.0580 support level for the strong 1.0511 38.2 Fib retracement of the rally from March 16.
Given the broad Euro dumping EURGBP also saw a sharp sell-off to close with a gravestone doji for the week. In daily charts we now have an oversold stochastic while macd is dropping. Intraday we are seeing a confluence of bears from the 4H level though hourly indicators are mixed. On the latter we have stochastic with a bullish divergence coming off oversold levels while macd is trying to bottom out. Note we are just above the support of the months range play from 0.8674 to the 0.8800 area. Consider shorts on any bounce that we have from atleast the 0.8762 midpoint for a test of the congestion floor.
After Friday’s sharp sell-off we have EURUSD starting the week with a downside gap with daily indicators showing stochastic poised to push for oversold levels while macd is dropping. Note it appears that the EMA lines are doing their job. In intraday charts we have a similar configuration between the indicators with stochastic oversold in both 4H and hourly picture while macd is dropping. Given the Eurozone’s problems we prefer a sell-on rallies approach for a new lower high lower low with 1.4146, our immediate resistance, as a possible sell-off point for 1.4020 the string support level.
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