EURGBP Not as strong as EUR is weak
Though the pair is experiencing a bit of a buying day, it hasn't been as strong as the Euro has been weak. After the JPY took all of its counterparts for a ride in late morning trade, it is becoming evident that the ride may be overdone and a good  Bounce maybe seen. Forget all the jargon about what kind of a bounce it is and look at the formations you are seeing on the daily and hourly charts 93.18 marks my pull back target for the USDJPY and 130.78 marks my pullback target of the EURJPY. The pull back in the EURJPY should help pull the EURGBP back to the .8584/8600 area, keeping the pair firmly consolidating between the 21 and 50 day SMA.
I will be following the hourly charts for the next couple of days to monitor for pull backs using this bump and run reversal. The shorter line is a little steep for me, a break may just end in Consolidation, but on a longer pull back the lower line may be a good target.
JPY Getting The Attention While CAD Slowly Leaks
Like an old leaky tire, the USDCAD is slowly plodding along, taking price higher and higher. The interesting thing about yesterday and today's price action is that it has finally broken above the 38.2 Fib line of the move from March 09 highs to June lows, opening the way for a 1.1928 50% Retracement. I have previously identified the daily highs from 05/06 and 05/18 as important Resistance, but the 50% line may trump and those daily highs easily passed. Those following the blog for some time know that I am looking for a possible move to...hold onto your lower jaw...1.2605. This would require a significant shift in risk, USD growth prospects, equity outlooks and general growth sentiment around the globe. SO I don't think it will happen soon.
The Boss: Long Time Comin', 559 Points Profit Taken
Quoting the Boss "It's been a long time comin' but now it's here" My EURJPY trade finally closed when it got to point A. My initial target was 126.61, but I am thinking that it may take several more days to get there, several new trades are presenting themselves, so in the interest of taking my profit to free up capital, I exited after the bounce with 559 points in profit**. Even though I had to babysit the trade for close to 2 months, I am ecstatic about finally closing the trade in the money.
DJIA Holding Lower
The index is supporting the notion that we may be entering a new phase of weakness in the market. As far as the bump and run reversal set up below goes, a break above the shorter line only targets a retracement to the longer top line. We'll have to see how that plays out. The shorter resistance line may keep the index falling for a few more days. Earnings start today, and should play a significant role in the near term outlook. As far as currencies go, USD and Yen get stronger on the indexes weakness and between the two; USDJPY usually rolls in the JPY's favor.
|
