Pair is well supported at 1.35, and expected sharp drop failed to materialize. Going into Asia now, and will likely see a slow rebound towards 1.3540. Taking a small profit as long as it’s there. I closed my short at 1.3506 for a 32 point profit.

The upmove continued, and has now hit strong resistance at 1.3542 (50% Fibo) which is also close to hourly resistance at 1.3568. We are near price channel resistance as well, and highly overbought studies suggest that a break above 1.3542 will likely be limited and at least a modest pullback is in store.

For these reasons I went short at 1.3538, with an inital target of 1.3435, but may let the trade run further if this may turn into the end of this correction. Stop is set at 1.3645, above the 61.8% Fibo level and hourly resistance at 1.3625.

Think back to the fall of 2007. The deflationary "liquidity crunch" that over the next year-and-a-half cuts the DJIA in half, decimates commodities, real estate and world markets is only starting. Almost no one believes that the crash is coming — to a large degree, because everyone is convinced that the U.S. Federal Reserve Bank, with Ben Bernanke at the helm, will never allow deflation to happen: It can just print money! Well, take a look at these two charts EWI's president Robert Prechter's published in October 2007.

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Manufacturing in the U.S. is expected to expand at a faster pace in March as market participants forecast the ISM index to increase to 57.0 from 56.5 in the previous month, and the data is likely to encourage an improved outlook for the world’s largest economy as the recovery gathers momentum.

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Has finally broken down below the multi-day consolidation lows (fresh 2010 low) to likely confirm a bearish continuation and open the next major downside extension towards key psychological barriers by 1.3000 over the coming days.

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The bullish hourly trend has reestablished itself in European trading, and prices marched up to above 1.35 in a straight line. We now seem to follow a pattern that is pretty much the inverse of last week’s, with yesterday price action closely mirroring price action on 3/22, just in the opposite direction. It will be interesting to see if this similarity keeps holding. If it does, we should see a sharp move down, back towards 1.3430, followed by a final push upwards towards 1.36.

Hourlies are overbought now, and some sort of correction downward is likely before this upmove continues. On the dailies we are near the declining trendline at 1.3570, which is key resistance.

I felt it was safer to exit my long trade last night at a small loss, and consequently missed out on this move. But that’s how trading goes sometimes. Now I will wait for a pullback towards 1.3430..00, which I would use to reestablish my long position, or remain on the sidelines until 1.3570 comes into sight. At that point I will start looking for a short entry opportunity.

Support: 1.3433 Fibo68   1.3401 Fibo50   1.3384 Fibo21, HSpptRsst

Resistance: 1.3536 HRsst   1.3568 H-3-22   1.3575 decl. TL Dailies

RSI: Hrly: mildly bullish, near o/b, Dly: rebounding, broke above prior decl. TL

Hourly Chart:

Gold futures are higher on Wednesday, as hopes for the global recovery removed safe-haven demand for the dollar, adding to the precious metal’s appeal as a hedge against currencies.

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EUR/USD Current price: 1.3503 Regaining the upside after worse than expected US data, pair remains…

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I closed my long at 1.3426 for a 31 point loss. Expected upswing may still happen, but charts look too bearish to me to stay in this position. Risk for an extended drop that could take out my stop is high, and I’d rather take a small loss now than risk a bigger one overnight.

The pullback came much later than I expected, only  after new highs were made in European trading. The Euro is currently supported by relief over the temporary solution of the Greece debt crisis, but technicals and recent price action are also in favor of this upmove to continue for a little longer. We are near strong support at 1.3433, the 38.2% Fibo retracement of the latest hourly range 1.3267-1.3536. 1.3433 is also strong hourly price support.  I expect this level to hold into US trading and we should see a rebound back to above 1.35 and higher. Bearish triple divergence on the hourlies is a concern, but I’ve seen this price pattern many times before and statistics are in favor of a rebound at this point. Daily RSI is rebounding and looks slightly bullish.

I went long at 1.3457 with a stop at 1.3330, target is 1.3568 at which point I will start looking for a short entry opportunity since my long term bias remains bearish until the declining trend line on the dailies is broken on a closing basis.

Support: 1.3433 Fibo68   1.3401 Fibo50   1.3384 Fibo21, HSpptRsst

Resistance: 1.3536 HRsst   1.3568 H-3-22   1.3575 decl. TL Dailies

RSI: Hrly: bearish, 3xdiv, Dly: rebounding, broke above prior decl. TL

Hourly Chart: