The cause of late night US Dollar weakness was stop loss order that triggered the Euro rally forcing Euro to get closer to another chart point 1.3380. Euro, which yesterday saw highs of 1.3342 in early European trading session due to strong German data IFO, indicating better business sentiment fell on disappointing statement by the European commission confirming that Euro-zone economy is heading for recession.
Today, we could see some upside move towards and beyond 1.34, as Euro will find support around 1.3330-35 levels, but I am expecting choppy and uncertain market behavior with unclear direction due to weekend and 1.3310 should act a strong support line for Euro. However, I will remain cautious once Euro reaches 1.34 zone.
Therefore, catching bottom and top of the range would be safe to play rather than jumping to catch the trend. It’s a tricky day ahead.
EURO @ 1.3366 = Euro buying is preferred around 1.3350, but suggest taking profit around 1.34 zones and would sell the currency if 1.3435-40 seen.
GBP @ 1.5740 = I will be more comfortable buying Cable around 1.5710-20 with Stops if 1.5680 surrenders. My target for the day is 1.5780-85, only break could push it towards 1.5815.
YEN @ 80.12 = Yen is a good buy around 80.15-20 levels, as long as 80.40 holds. Looking for a test of 79.88
GOLD @ $ 1779 = Gold may hold $ 1774-75 for another test of $ 1787, but buying around top could be risky