Quote of the day: Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital. - Aaron Levenstein
Trading strategy: small short at 1.2430, stop at 1.2490 (0.5% risk), objective at 1.2310
Another day, another leg down: the euro fell near recent low into the 1.2450 zone - thus forming a double bottom pattern. However, other double bottom have been formed just few weeks ago (at 1.2520 - May 6 and 13) and it was easily breached to the downside, the difference now is that there are 5 daily lows into the 1.2150/75 region, suggesting that it is a strong support. The recoveries initiated after diving there were not weak at all - measuring at least 200 points. The euro is recovering some ground while writing this, being eager to reconquer the 1.23 region. First important intra-day resistance comes at 1.2340/50 and it looks that it will be tested. In case of a breakout - 1.2415/30 and 1.2470/00 might be next. Sentiment remains bearish on both medium-term and short-term time frames and a real change is almost unthinkable. What's highly possible though is a short-covering rampage, before resuming selling - again, look at EURAUD. Current exchange rate is 1.2274 @05:10 GMT
Support:1.2200, 1.2130/45 and 1.2000 Resistance: 1.2340/50, 1.2415/30, 1.2470/00, 1.2550 and 1.2620 Market sentiment: long term - bearish, medium term - bearish, short term - bearish, intra-day - bearish
1.4500 is still a pain for the few bulls left, as the consolidation continues not far from it and recent price action into the 1.4250-1.4350 zone suggests that we are dealing with a strong support and a pullback is likely. Keep an eye on the 1.4500, as a potential break might open 1.48.
It's quite clear now that the last down leg to 1166 was corrective and 1250 is back on the radar. Short-term sentiment is again bullish since breaking above the 1200-1210 region and potential dips to 1200 might provide buying opportunities.
Have a great day!