Following Friday’s breakdown through the 200 dma we find ourselves below the level today and looking pretty weak.
The break through the option barrier at 1.2950 didn’t illicit any sort of follow through and the profit takers strolled in late in the day and took the edge off the losses.
1.2950 is the sticking point once again today with further option related trading here also.
The downside still seems favourable from here and the closest level of any note is the 55 wma at 1.2880. A break and close of that level opens the trap door to the late March/early April lows at 1.2750.
So far there has been no semblance of a bounce and what little there has, has been sold into again this morning. The bears are in control and looking convincing.
We will need to re-take 1.3000 to put them under any sort of pressure and if we do the the 200 H4ma stands in the way of further gains at 1.3018. From there the 38.2 fib from the dollar move on the 8th May comes in at 1.3033. I don’t hold much to such a short term fib but if the sellers want to stay in control it’s these levels they are likely to use just on the back of this main move down.
With no data until the US retail sales these levels may well keep us defined until later.
When all is said and done we still remain in the well trodden 1.29/1.32 range, despite the shocks and dramas. Just when we think we’re going to break one way or another we get a reverse.
That suggests two possibilities. 1. There’s no real interest in the market to go in either direction or 2. There some big money playing the edges
We know the giant panda likes his DNT’s so don’t rule this out as a reason for the ranging.
