After forming a medium bearish tenkan cross on July 5th, the Euro has remained relatively below the tenkan the entire time, suggesting strong momentum behind the selling with constant pressure. However, besides the large 2-way doji bar 2 candles back, we are suspecting a possible pause in the downtrend.
This is mostly based on daily and 4hr ichimoku number theory. On the daily chart, we have just formed a single section move from the last swing high, so possible turning point here. Keep in mind, this is after a marginally new low. On the 4hr as well though, we are creeping up on a period and 2 sections move from the top of this most recent sell-off. So when combined with the price action, we are sensing a pause in the selling here as possible over-extension regardless of the general all bearish ichimoku theme.
We'd like to wait for a pullback to the 1.2360 area which will likely bring the chikou to the price line or tenkan which may act as resistance. This combined with a very thick kumo and we have a good rally to sell point, along with a potential new bearish tenkan cross should we get the anticipated pullback.
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Global Market Commentary:
The Fed Minutes failed to give global markets a boost (read executives who hold stocks) since they offered no new hints about possible QE3 coming or more bond buying programs. Although some traders were expecting this, it didn't materialize from the minutes release. This hurt stocks while favoring the USD against the basket of majors.
The Dow lost 48.59 pts while Asian markets are selling off aggressively mostly due to really weak AUD employment numbers coming well under expectations.
Upcoming Economic Announcements:
|EUR ECB Publishes July Monthly Report||08.00GMT||04.00EST|
|EUR Euro-Zone Industrial Production w.d.a. (YoY)||09.00GMT||05.00EST|
|USD Monthly Budget Statement||18.00GMT||14.00EST|