After posting a strong 3 day pullback, the Aussie found strong support at the kijun sen support forming an outside bar in the process. This also coincided with a short term channel support which has now played out 3x on both ends. Although the Kijun is currently flat, it held price and combined with the tenkan climbing, I am expecting more upside.
The chikou though rejected off the Span B and is still having trouble making headway which leaves me to believe upside will be seriously challenged around 1.0450 - 1.0500. Bears can look for price action triggers around here to possibly sell if the pair shows weakness on approach. Bulls meanwhile can look for intraday longs around 1.0200 targeting 1.0300 and 1.0450.
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Global Market Commentary:
Spain is getting closer to asking for a full bailout as the regions' insolvency becomes evermore apparent. Regardless, a short squeeze seems to be in play on the EURUSD and majors which is not surprising considering it has been bruised heavily as of late. This combined with stronger ECB measures and whispers of Central Bank involvement (read easing) coming soon to a market near you, and markets gained some lost ground.
Regardless, New Home Sales in the US missed by the most in 20mos coming in at -8.4% reminding us there are hot potatoes and disasters looming in every major economy, and it only takes one ball to drop for us to be sellers.
The DOW gained 58pts while Gold closed at $1608. If easing is in the pipeline, expect Gold to gain heavily on this so what we could be seeing is accumulation ahead of the next round of easing.
Upcoming Economic Events:
|EUR German GfK Consumer Confidence Survey||06.00GMT||02.00EST|
|USD Durable Goods Orders||12.30GMT||08.30EST|
|USD Pending Home Sales (YoY)||14.00GMT||10.00EST|
Make sure to read my newest article 2 Key Clues to Understanding Support and Resistance