Intraday Market Thoughts

Archived IMT (2011.01.13)

by Ashraf Laidi
Jan 13, 2011 16:13

WHY THE EURO DOWNTREND IS NOT OVER? EURUSD SHATTERS $1.33 figure, weakening the case for EUR bears on a combination of The combination of Germanys backing new powers to the European Financial Stability Facility and robust auctions (despite higher yields in Spain and Italy) is enabling traders to test the upper limits of the euro's trading ranges--$1.33s, which stand around the 55-week MA. I was CLEARLY WRONG for having focused on the $1.3280-00 as the breaking point for euro shorts. My error was with the actual level rather than with the trend. If you do recall, EURUSD broke above its 55-week MA during the last 2 weeks of December as well as during the 1st week of Jan But DID NOT END the WEEK above those levels. ANOTHER CLASSIC EXAMPLE of the euro making FALSE BREAKS was the break above its 200-WEEK MA between early Oct and mid Nov. Those comprised daily breaks above the 200-WEEK MA, BUT WHICH NEVER BROKE ON A FRIDAY. My cyclical trend analysis suggests that $1.3380 will be the required level of a weekly close. This may sound like moving the goal posts but my reasons for this level are tested and proven. This explanation is mainly technical in nature, albeit there are fundamental reasons but will not go thru them now. Markets have proven notorious in showing false breaks, especially in the weeks of Dec 19 as well as the past 2 weeks. THERE IS A TIME WHEN DIRECTIONAL BIAS ought to be changed, but THIS IS NOT IT. I CONTINUE TO EXPECT $1.27 this quarter and $1.23 near MID Q2. To those who are in London on Jan 23, consider coming to my seminar so we can go through these situations, which teach us to draw the line between VOLATILITY & DIRECTION. REGISTER HERE FOR MY INTENSIVE WORKSHOP:


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