Euro Shorts Exited for Small Profit. Dollar/Yen Set to Close Above 100-Day SMA & Ichimoku. Cable Still Propped Ahead of 1.4055 Higher Platform Base. Dollar/Swiss Slowly Grinding Higher. Dollar/Cad Waiting to Break Triangle. Australian Dollar Confined to Broader Range Trade. New Zealand Dollar Bounces Off 78.6% Fibo.
Thursday's reversal has extended back towards the former support now turned resistance zone in the 1.2700's and our short trade has been triggered. A lower top is now sought out, ideally below 1.2800 ahead of the next drop through 1.2500 and towards the key trend lows at 1.2330 (28Oct low). Only back above 1.2800 concerns. Daily studies are starting to look a little stretched but we will not look for a more significant contra-move until 1.2330 is tested. We have decided to cover our short for a small profit given the bullish close on Thursday. Position: SHORT@ 1.2705 BOOKED PROFIT AT 1.2690. STAND ASIDE.
The market could be poised for a significant trend change with the pair looking to close above the 100-Day SMA and daily Ichimoku cloud for the first time since September 2008. We have trailed our stop on our long trade to lock profits and will be looking for a direct test of key neckline resistance by 94.60 over the coming hours. With daily studies starting to approach overbought, will look to take to the sidelines once profits booked on position. Position: LONG@ 92.80 FOR A 94.60 OBJECTIVE, STOP @1.2875.
The market is in the process of consolidating following the latest drop out from the 1.4990 (9Feb High) bear channel top. Hopes for additional recovery have now faded and we look for a near-term break back below 1.4095 to end the latest bout of consolidation and accelerate declines back towards the critical trend lows at 1.3505 (23Jan low). A break back above 1.4605 will be required to negate outlook. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
Remains locked in a multi-day sideways chop with much of the price action confined to the 1.1500-1.1830 area. However, given the broader up-trend and ability to grind out higher highs, our bias is for a bullish continuation above 1.1830 back towards the key trend highs from mid November at 1.2300 (21Nov high). Dips should continue to be supported ahead of 1.1500 with only a break back below the latter to delay outlook. For now, we prefer to stay on the sidelines until a clear breakout has been achieved. 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 1.2665 and we will be looking for a daily close above the latter to confirm a breakout which will ultimately 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). However, the latest topside failure on Tuesday keeps the triangle intact and could open yet another retest on the triangle bottom in the 1.2000 area. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
The latest round of setbacks have been well supported on dips ahead of 0.6300 and the market has since rebounded back above Wednesday's high to reintroduce the prospects for basing. It now appears that we remain confined to the broader multi-day sideways consolidation that has defined trade since October 2008 which leaves us with a mildly bullish short-term bias at current levels. Nevertheless, we remain sidelined and will await a better signal. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
The drop off of the 0.5450 recovery highs has been well propped by the 78.6% fib retracement off of the 0.4960-0.5450 move and Thursday's bullish reversal day could be setting up a fresh higher low now at 0.5060 ahead of a return back to and beyond 0.5450 over the coming days. It is still too early to tell at this point, and at a minimum, a break back above Thursday's 0.5190 high would be required to strengthen the bullish case. As such, we prefer to remain on the sidelines for now. Strategy: SIDELINED; AWAIT CLEARER SIGNAL.
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