- Currently 2 doji's at the top of the Ichimoku cloud - Stochastic extremely overbought - Almost perfect negative correlation between the EUR/USD with FTSE, SPX - Sitting right below the 0.382 Fib line - If tonight's GDP is revised down there will be a decent sell off. Tomorrow's ECB decision will have a much larger impact with Friday's NFP having the final say...
We're still in a solid downtrend with sell offs occurring every time it touches the cloud. This should happen again in the next couple days. There aren't any fundamental issues to change this either.
- Pushing upper boundaries of wedge - Strongly capped at 0.5 Fib ~ 1.30 - Supported by 0.236 Fib ~ 1.294 - Euro consumer confidence will play a small role, but the huge variable is US GDP at 12:30 GMT. - GDP > 2.5%: QE expected to end more quickly = USD positive -> EUR/USD down towards trend line support - GDP EUR/USD above 1.30
- Strongly capped by 0.236 Fib and upper wedge barrier - Supported by 0.98 and lower wedge barrier - ATR at lower pivot point - I'm short on the CPI release, but there isn't a clear enough long term signal for a lasting trend just yet. A breakout appears imminent on a larger time frame.
- Scenario 1: - PPI shows the economy is slowing - This seems likely given the disappointing Chinese data that has been coming out lately - Would cause a drop to the 1.015-1.017 range Scenario 2: - PPI surprises to the upside - Still capped in the 1.03-1.035 range due to USD strength and bad Chinese data - Personally, I'm risking 1.03 with 1.015 in sight....
- Wedging into event risk. ATR going to a minimum. Scenario 1: Rate Cut Disappointment - Last rate cut disappointment resulted in approximately a 200 pip increase by end of day. - This would be capped near 1.33 the 0.236 Fib line of the 7/25/12-2/1/13 rally. - The negative fundamentals at that time resulted in a 500 pip decrease in the week following. Barring...
- At upper edge of 2 week channel - Overbought RSI encountering 2 week resistance and showing signs of reversal - MACD nearing 2 week resistance as well - Upper edge of BB - 3 previous cases have all shown the same technicals with a wedge into a large exhaustion move followed by an even larger drop - If we receive confirmation of a triple dip recession, 1.52 will...
- Capped by downward channel, ichimoku, and 0.382 Fib all in 1.303-1.306 range - German PMI's disappointed last night. Expecting this to continue into IFO's - ATR at monthly low is an indication of its preparation for a large move
- Encountered strong resistance at the cloud on two attempts now - Below 9 day MVA - Oscillating around long term 0.382 Fib - Poised to return to 0.618 Fib - If 1.317 fails to hold on a daily close, a similar scenario will play out from 0.236 Fib line
- Appears that we will close the week with 2 almost perfect dojis - Also appears to be the start of a stochastic cross - I've highlighted the previous areas with even decent dojis and stochastic crosses - This is all happening at former price support turned into resistance - The ATR seems to be following a Fibonacci confluence very well, and I see it as more...
- Running into resistance near Ichimoku cloud - This is reinforced by the 0.382 Fib line - 0.382 Fib line was a significant previous top on what looks like the left shoulder - Stochastic entering overbought territory - Euro still likely has more correction potential into 1.32-1.33 range before resuming down trend
The GBP/USD has finally reached an ideal level to short from after retracing to the 0.382 Fib line. Technically, the RSI divergence reinforces this scenario. Fundamentally, the GBP shouldn't have the same support the EUR has had the past few days from yield chasing. Keeping the stop tight, but it's statistically worth staying in with a downside of sub 1.50 in...
The correlation between the USD and S&P 500 could continue to grow as the DXY hits a one week trend line at the edge of the Ichimoku cloud & BB. This also coincides perfectly with multiple market moving releases. If they disappoint as much or more than expected, it appears the dollar will fall back to the bottom of it's current channel. Although low retail sales...
Yesterday produced a decent Doji, and a cross on the stochastic. All of this right at the 0.382 Fib line. There also seems to be an interesting pivot at the 0.100 ATR. Which if it stays in effect should start the next leg of the trend. If 1.312 doesn't hold, the 0.5 Fib line and Ichimoku cloud provide an even higher probability short trade near 1.32.
After a couple of really strong days the GBP/USD is encountering some selling off near the cloud. It's also trading right at the 50 day MVA and upper edge of the BB. The long term outlook is still negative, but in the short term it could still correct into the 1.54 range. I'll look to short from a little higher up.
- BOJ: $146 billion monthly - US Fed: $83 billion monthly - SNB: Buying ~ $10-20 billion Euros monthly(They've pledged an unlimited amount to support 1.20) - BOE: Averaged about $15 billion monthly since October 2010(Flat for now) Relating to EUR/CHF shown here, it is easy to see where the SNB is starting to intervene to artificially inflate the Euro. This...
The downward trend has been continuing in a fairly regular pattern of repeating wedges with rallies being contained by former support. Which has also been corresponding nicely to the Fib levels. Any rallies should be contained by 1.297-1.3. I'll stay short from there looking towards 1.265.
Chance of a correction to 1.285-1.29, but the break of the .5 Fib line exposes .618 at 1.265. This has also been a major support/resistance line for the past year.