Break of 1.1637 Brings Up 1.1823 and 1.1982 In Quick Fashion

Should 1.1637 break, longs for 1.1823, the Daily High from 05/06/09 and 1.1982, the Daily Low form 04/16/09 may print rather quickly. I find it humoring to watch the see-saw action between oil and the pair. CAD gives while oil weakens, then oil flexes and the CAD slumps, all the while allowing both to resume its upward movement. If oil creeps too high it may be like jamming a sticking to the wheels of the economy, and we may find ourselves again flying head over heels. The pair is approaching the 38.2% Fib Retracement line at 1.1659 of the larger move down from 1.3063 to1.0973. I think we will see a slow plod forward as price bounces around here. However in the interest of disclosure, I am long the pair for much higher retracements.

Stocks/DJIA Not to Excited As Spector Of Weakness Looms Large

I mentioned in yesterday's article that the DJIA looks like it may be in the throes of producing a head and shoulders and that if it completes, that would put the index in the 7800/750. In earlier articles I have suggested that an even deeper pull back may happen. Though there is allot of ground between current prices and those levels, it can happen pretty quickly is sentiment changes. Overnight tests of extreme levels in the FX market put the GBP at yearly highs against the USD, drove the USDINX below 79.50, creating a good deal of flow away from the USD. However as soon as those levels encountered opposing pressure they quickly relented. We find the EURUSD lower, GBPUSD almost 300 off its high, EURJPY creating only 10 points from its open, GBPCHF almost 200 points off its highs and USDCAD pressuring the high from 06/25 at 1.1637. What I make of this is the last gasp I mentioned yesterday as well. Before the crushing fall last year we had a last gasp from the EURUSD to an all time high if 1.6041, with similar stories across the board. Technically speaking, it's getting interesting.

Time Is Eating Into Bump and Run Reversal Validity

I really like using bump and run reversal to pick apart the market and identify trades but, this one has done nothing but cruise along sideways. I entered a low risk small long trade when price broke the short descending Resistance line form yesterday's chart, but that is likely to get closed with a stop around 158.00 and my target at 162.50 isn't looking very promising. I'll be waiting for either the short ascending trend line to break on the way to target A, or my long to hit its target at 162.50

Respect for the BB Center Line Keeps EURJPY  Slouching

After an overnight test towards the descending resistance line, the EUR finally reliquished a bitof it's strength, or was it the assertion of JPY strength that's kept price in relativly close proximity to it's open. Either way, the pair is getting closer to a break out, and last nights breaks above 135.36/47 may be a head fake. I will be waiting for the close outside the support and resistance lines before I pull the trigger on a nother trade. The bummer part is I am missing a clear target on the long side, but have a good one way down at 126.61. I take that back, I have along on the top at 143.86 and both seem just as likely. I'll have to see.

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