Euro kisses 20-Day SMA and Retreats. Dollar/Yen on approach to 100.00. Cable propped for now ahead of 1.4095. Dollar/Swiss still going nowhere. Dollar/Cad content to hang in triangle for as long as possible. Australian Dollar shows relative strength. New Zealand Dollar price action less than compelling.
The market continues to consolidate above the recent range lows by 1.2515 with a higher platform now forming by 1.2660. Price action has been quite choppy and no clear short-term directional bias can be established at current levels. It is however worth noting that the pair has been unable to close above the 20-Day SMA since January 2, and multiple attempts to do so over the past few days have failed. Key levels to watch above and below remain 1.2995 and 1.2660. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
The market has been rallying in unrelenting fashion over the past several days since breaking above the key double bottom neckline resistance at 94.60 on Monday. While the double bottom trigger ultimately projects gains back above 100.00 to the 104.00 measured move area, we continue to look for opportunities to fade the pair intraday with the daily studies so heavily overextended. The daily RSI has finally broken above 70 for the first time since June 2007, warning of the need for the market to pullback a bit, to allow for a healthy correction. Ideally, we would like to see a pullback to retest the previous resistance turned support at 94.60 before a renewed upside extension back above 100.00 and towards 104.00. The 50% fib retracement off of the major 110.70-97.15 move comes in at 98.90 and is the next level to be tested. Strategy: SIDELINED; AWAIT CLEARER SIGNAL. (We had recommended shorting at 98.90 today, but it does not appear that this trade will trigger after gains stalled out by 98.70)
The pair is rolling back over after the latest rally attempts stalled out by the 61.8% fib off of the 1.4990-1.4095 move, and failed to close back above the key 50-Day SMA. Look for setbacks to continue into Friday with an acceleration expected on a break back below 1.4095 (18Feb low) to expose the critical trend lows by 1.3500. Only back above 1.4665 will negate. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Remains locked in a choppy multi-day sideways consolidation with price action largely confined to the 1.1465-1.1890 area. Last Friday's extremely bearish reversal day has shown no follow through this week, with the market bouncing back into the mid-range. The overall structure however remains bullish and we expect dips to continue to be well supported ahead of an eventual break to challenge the key 2008 highs at 1.2300. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
We have seen an ongoing contraction in volatility to the point where we have reached the apex of a very prominent triangle that has defined trade since late October. Falling triangle resistance comes in at 1.2645 and we will be looking for a daily close above the latter to confirm a breakout which will trigger a fresh upside extension exposing a direct retest of the 1.3020 October 28 trend highs. Ultimately, the upside break should project gains back towards 1.4005 (2004 Highs) over the coming months (measured move objective based off of widest point of triangle). For now, Wednesday's bullish reversal has been negated to delay breakout prospects. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Hopes for a recovery following the latest bounce out from 0.6335 (18Feb low) are fading, with the market now seemingly content on consolidating. This does not bode well for bulls and once again exposes the recent range lows by 0.6335. Nevertheless, it is too difficult to establish a clear directional bias and we remain sidelined. Key levels to watch over the coming session come in at 0.6555 and 0.6455. The commodity currency has however been well bid on the crosses today with notable gains against Kiwi and Yen. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
The pair is locked in a bearish consolidation over the 0.4960 (2Feb low) trend lows. The overall structure remains grossly bearish and a retest of the latter is favored over the coming days with an acceleration expected on a break towards 0.4500 by the August 2002 lows. However, with daily studies closer to oversold, selling at current levels is not compelling and we remain comfortably sidelined. Back above 0.5210 negates. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
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