Article originally published on innerfx.com and republished here with permission
Quote of the day: “When you have only two pennies left in the world, buy a loaf of bread with one, and a lily with the other.” ~ Chinese Proverb
Hello. Things are looking bad for the euro once again as the debt contagion spreads to Italy and the markets resumed the decline, all important currencies trading lower against the CHF and JPY. Here’s a quick update to my yesterday’s post:
Support breached but JPY lost some ground (temporarily) on BoJ intervention fears (related post – in case you missed it – USDJPY: Some People Just Don’t Get It). Sorry buyers, but there’s no sign of recovery yet – you better wait for it to return into the previous range.
A good run to the downside but it’s probably time to wait for the next selling opportunity
Both 4-hrs and daily charts are bearish as resistance into the 1.4430 zone remained intact as last recovery was short-lived, but the longer term charts such as weekly and monthly are bullish. Speaking of monthly charts – we’re still above the 1.400-1.41 support region where the pair found bids in the last 3 months. On the 4-hr chart, support around 1.4260 was breached and that’s a good reason to look for selling opportunities, targeting next barrier within the 1.400-1.41 range.
Regarding the dollar, as noted a few days ago – I think it is going to retest the former support trendline soon. Keep an eye on it.
and last but not least – one of the key risk indicators
Key support zone under pressure again. I’ve been watching this level for several weeks and I still think that a real breakdown below this level could turn violent (read: equity markets imploding)
Have a great day!