Quote of the day: Some people use one half their ingenuity to get into debt, and the other half to avoid paying it. - George Prentice
Trading strategy: small short at 1.2470, stop at 1.2520 (0.5% risk), objective at 1.2370.
The euro fell to as low as 1.2177, erasing most of last week's gains. Downside pressure remains high as yesterday's recovery from 1.2177 to 1.2385 was unsustainable and the 1.22 region is back in focus at time of writing. The EURJPY was the main driver of euro's weakness as the Yen continues to strengthen across the board while the equity markets are facing large declines. First resistance today comes at 1.2340/50 and a break out would suggest that yesterday's recovery towards 1.2400 was not part of a minor corrective phase but rather part of an ongoing recovery which may extend to 1.2440/50 and the 1.26 region. However, selling into strength/minor rallies seems the best bet for now. Selling into break downs is also a good plan but one should play it careful as massive short-covering could be just around the corner and what we witnessed last week in EURAUD's huge reversal should be a warning of what can happen nowadays - when the markets are driven by panic, uncertainty, rumors, political and military tension, Central Banks interventions and other ingredients required to create a perfect storm. Current exchange rate is 1.2294 @06:22 GMT
Support: 1.2250, 1.2200 and 1.2130/45 Resistance: 1.2340/50, 1.2440/50, 1.2550 and 1.2620 Market sentiment: long term - bearish, medium term - bearish, short term - bearish, intra-day - bearish
The Aussie dollar's sell-off has brought into our attention lows not far from the .8000 psychological barrier and it doesn't seem to be over yet. An interesting setup can be seen into the weekly chart below - where you can see 3 zones representing the corrective ranges since the uptrend started in late 2008. Current sell-off extended back into previous corrective region but the range upper limit still provides support - and this can be seen on the daily charts, where we can notice Aussie's attempt to recover from last dips towards .8000. A potential continuation of yesterday's recovery may signal a temporary reversal, opening .8580/00 - the upper corrective range lower limit. Current exchange rate is .8250 @06:22 GMT
Have a good day!