EURUSD - 1.2287

The euro is rebounding as no news is good news in Europe - as the risk meters aren't flashing red the way they were earlier this month. Therefore, current euro recovery is not driven by good news but rather by the absence of bad news, so caution is advised for those buying into short-term momentum's strength. In case of pullbacks from current levels - now around $1.2263 - look for intra-day support into the 1.2150 zone, which has been a stable bottom for 3 weeks and provided only a minor barrier in the first phase of current rebound - last week. On the upside, resistance is formed at 1.2370 by the 61.8% retracement of 1.2670-1.1875 - May 21 to June 7 down leg. According to the COT data released last week - euro short contracts are back into the record territory while the small specs are modestly buying since last week - being helped by the ongoing short-covering. However, the medium term sentiment remains highly bearish for the euro. If we look at the size of previous retracements in this bear market started in November - we notice that they were around 420 points on average - with the largest correction in the beginning of May - when the EU and IMF agreed to provide the Greek bailout. Should this corrective pattern repeat? Time will tell... likely within the coming days.

EURUSD

EURUSD 4hrs chart 6-14-2010
EURUSD
EURUSD daily chart 6-14-2010
EURUSD
EURUSD COT 6-14-2010 (via timingcharts.com)

GBPUSD - 1.4760

Important resistance formed around 1.4800 comes under pressure as cable continued to strengthen against the softer dollar. Former support trend line coming from 1.4250 is again being tested, for the 2nd time this month. Last week's attempt to break higher was short-lived but cable found support on the pullback to 1.4500 - confirming the interim bottom there. Said resistance around 1.4800 is quite an important level, if we count the tests from the upside in March and May. A potential break out is in the cards for now - opening 1.5350 which is the next major obstacle.

GBPUSD
GBPUSD 4hrs chart 6-14-2010
GBPUSD
GBPUSD weekly chart 6-14-2010

Other setups

AUDUSD - .8635

AUDUSD
AUDUSD 4hrs chart 6-14-2010

EURGBP - .8321

EURGBP
EURGBP daily chart 6-14-2010

Gold - 1217

Gold
Gold daily chart 6-14-2010

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