Tuesday’s low volume relief rally appears to have been a ‘one hit wonder’ as we resume the global equity market sell-off with US equity indices closing lower more than 4.0% for the most part as global markets enter bear territory. In Asia what has surprised us is the relatively tame sell-off from the open considering the US losses though releases merely confirms our risk averse views. Note we just saw Australian jobs numbers for July where the Unemployment Rate surpised us by pushing up to 5.1% against a steady read consensus of 4.9% and the Employment Change data dropped to negative territory losing a hundred jobs against consensus expectations at 10.2K. Interestingly enough we are currently seeing broad based dollar weakness though expect the currency should regain initiative once Europe opens.
We find EURUSD still inside the daily symmetric triangle with prices currently bouncing up despite a bearish bias from the indicators %K under %D in stochastic and macd line under its signals though slope for these lines are flat. From the lower time frame we have mixed signals as 4H stochastic remain oversold and macd is dropping while in hourly charts we have macd bottoming out and stochastic heading higher. At this point we appear to have broad based dollar dumping, likely position squaring after the NEw York sell-off. We prefer remaining sidelined looking for shorts from under the 1.4238 region later on.
We have finally triggered the daily broadening pattern to suggest a bearish trend reversal in GBPUSD, note our next key support at the psychological 1.6000. From the indicators we have daily stochastic oversold while macd is dropping, EMA lines themselves are turning lower though absent any bear crosses. In intraday charts we have mixed signals with 4H indicators seeing a confluence of bears while hourly charts has macd poised at a bullish cross and stochastic just coming-out of oversold levels. For now allow for a technical rebound following yesterdays sharp sell-off though we prefer selling from under 1.6192.
We have resumed the broad market sell-off with AUDJPY also ending down with a huge black candle. Daily indicators are seeing mixed signals macd’s heading lower along with the EMA lines while stochastic has yet to turn after coming out of oversold levels. Considering yesterday’s sell-off we risk some mean reversion once more. In intraday charts we appear to have a bullish bias 4H indicators see a confluence of buys while hourly charts has macd’s poised at a bullish cross while stochastic is heading for overbought levels. Note we have a double bottom from the hourly charts and data coming out at 0130GMT. Poor jobs numbers would suggest we take the sell-side from just under 78.99 your pattern trigger, better than expected results could see us pushing for 79.81.
Wednesday saw AUDUSD getting rejected from the 200D SMA with daily indicators mixed as stochastic comes off oversold levels while macd’s are down and EMA lines drop following some dead crosses. From the 4H picture we have mixed signals as stochastic remain in oversold territory while macd flattens out just above the signal line. In hourly charts we have macd’s bearish while stochastic attempts to come out of oversold levels. Note we have Aussy data at 0130GMT better than expected jobs numbers should be enough for a push up to the 1.0268 region though given overall trends we will use this as an entry for shorts from a better price area.
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