EURUSD Up Over 100 Points From  Daily Low
The low this morning was printed at 1.3876 and price somehow over the day made its way back over it's opening price to close positive for the day. Using DE I would now be open for a tumble that builds on the back of Thursday and Fridays losses. I would also expect a test of the top side daily highs form the last two days. It's a hard pair to trade right now because no direction is opening up and last night’s losses were so roundly rejected when Service Sector PMI released better than expected. I still feel good about the DJIA falling below 8200 which would almost certainly bring the USD and the JPY back into favor. Investors are betting that the PMI number will translate into better than expected earnings this week and next.
USD and Yen Losses Extend In Late Afternoon Trade
Though most pairs are far from their opening positions still, the USD and Yen have given back significant positions of gains made Overnight. This comes on the back of what appears to be a positive close for the DJIA and Equities in general. On Wednesday corporate types start releasing earnings and much may be made out of those releases. For now, the USDINX is holding above the red line form the chart below, which was identified earlier this morning. The EURJPY is making strong gains and is now approaching 133.25. I mentioned I didn't expect price to close around daily lows because price seldom closes outside of the S# or R3 lines. GBPJPY had to cover over close to 200 points to get back above S3 and it has done so very easily this afternoon, putting in 5 straight hourly gains on a Bounce from 153.00. Those betting against the USD and JPY should be prepared for losses this week should earnings be flat or negative.
EURUSD Holding Below 21 DSMA and Previous Support
The move below the 21 day simple moving average, and a subsequent close, may well bring the sellers into the market. I would like to see a break below line "b" before initiating a trade though. I don't have a clear black candle target but certainly the head and shoulders show by the black lines suggest a target of around 1.3300, several weeks off. For the next month or so a lot is going to be determined either by the gradual decay of equities and risk, or the restoration of growth prospects in Europe. We will have to wait and see how earnings go starting on Wednesday morning.
USD Index consolidates Overnight Gains, Slipping to 80.49
The dollar index began consolidating its overnight gains after reaching 80.80 descending Resistance. This area will be critical for further USD strength going forward. After the A and B formations played out, I expect a drop to the short black line and maybe back to the dual purpose red/green line.
GBPUSD, GBPJPY and GBPCHF All Signal New Potential Trades
All three pairs have exhibited the appropriate action to trigger potential trades. All trades would be long positions, but I will wait until the daily close. That Is how I back tested, so that is how I will trade. I'll update these three signals at the end of the day.
DJIA Hovering Over 8200, My Call For Over a Month Now
I have been calling for 8200 and lower for over a month now, but make no mistake, 8200 will be a difficult nut to crack. It will probably happen in spectacular fashion. A total blow out is what I expect when it finally goes. Most investors are hanging on to a thread of hope and when that hope disappears; it should plummet as though it had a grinding stone around its neck.
USDJPY Breaks Support On Yen Strength, But Bounce Ensues
Now that the NY CUT has come and gone, the Yen strength may resume. Buying that brought the pair back up from 94.65 daily lows, looks like it is subsiding. I may have to cut my losses on my long trade, and reevaluate the trade. An hourly close below this support may bring up 94.00 and a break there opens up the bottom side down to the 87.00 area. All this after a realization that the economic situation worldwide is going to last longer than most thought.
GPYJPY: Yen Surges In Last Ten Minutes To Test Short Term Support at 153.11
EURGBP Breaks Above 31/2 Month Resistance
Friday closed below this long term resistance but on the EUR opening last night, price rocketed from .8579 to .8645 and was barely above a 100% extension of the move from .8597 to .8435, this tells me that today may be done to the top side. Since hitting that high though, price has fallen back to just above .8600 and I do definitely see a close over the long term resistance though. The strength here will be based on how much one or the other is perceived as being overdone. I think the GBP is much more so than the EUR.
EURJPY Below Key Support
There is an almost two and a half month long support line drawn off the bottoms of 4/28 and 5/18 that was broken on the 23rd of last month and again last night. Today looks like it may actually close below the line though unlike it did on 6/23. I doubt we will see a close much lower than we are at right now though, my reasoning? Current price has hit S3 daily pivot and rarely closes below the S3 even if it is hit. However, support looms large at 131.48 lows from 06/23, not far below 131.68 lower daily BB Prices do seem to be opening up to the bottom.
|
