My entry was too early, further sideways consolidation will likely last into the weekend, ahead of the G20 meeting. I set the limit on this trade at 1.2300 in an attempt to exit the trade at break even.

Consolidation yesterday was followed by a break to the downside. Pretty strong recovery since, but the bearish bias remains on the hourly chart, and hourly RSI is capped by a declining trend line. There is quite a bit of room here for a drop and we’re at a low risk entry level. I went short this morning at 1.2300 with a stop 15 points above yesterday’s high at 1.2406. Initial target is 1.2160, but will let this trade run if price dynamics shows strong and accelerating momentum over the next few days.

Support:    1.2260 HSppt   1.2207 HSpptRsst   1.2167 L-6-15

Resistance: 1.2352 H-6-16   1.2387 H-6-24   1.2403 Fibo1.27

RSI: Hrly: bearish, broke below rising TL and capped by decl. TL, Dly: neutral, mildly bullish

Hourly Chart:

A convergence of price and several short and long term moving averages is forming on the hourly chart, indicating that a major directional move may be just ahead of us. Given that the shorter term averages are below the longer term ones, this move should go to the downside. I expect further sideways consolidation for the rest of the session, along with a narrowing price range and then a sharp break to either the downside or the upside.

Support:    1.2207 HSpptRsst   1.2167 L-6-15   1.2153 HSpptRsst

Resistance: 1.2352 H-6-16   1.2403 Fibo1.27   1.2440 SpptRsst

RSI: Hrly: bearish but supported by rising TL, Dly: neutral

Hourly Chart:

The pair managed to close above the daily EMA10 and EMA20 yesterday, which maintains a slightly bullish tone. The drop this morning came without a push to the upside first, and is likely lacking strength for significant follow-through. Hourly RSI is near oversold support. I expect price to move sideways or even slowly recover for the remainder of the NY trading session.

Support:    1.2207 HSpptRsst   1.2167 L-6-15   1.2153 HSpptRsst

Resistance: 1.2315 HSpptRsst  1.2352 H-6-16   1.2403 Fibo1.27

RSI: Hrly: bearish but near o/s support, Dly: bullish but near neutral and rolling over

Hourly Chart:

The expected drop to the 1.2285 happened, but took two days to complete. Still, this paints a slightly bearish picture and there’s a good chance the long term down trend is in the process of re-establishing itself over the next few days. A close below the daily EMA10 and EMA20 (currently in the 1.2270..90 range) would be in favor of that view.

Hourly RSI is bearish. For the rest of the day we may see a continuation of the downtrend, with a slight slow recovery starting in Asia. I’m sidelined until I see some more directionality in the daily trend, right now we’re in the middle of a turn.

Support:    1.2241 HSppt, L-6-17   1.2207 HSpptRsst   1.2167 L-6-15

Resistance: 1.2352 H-6-16   1.2403 Fibo1.27 1.2466 Fibo1.618, H-6-21

RSI: Hrly: bearish, Dly: bullish but near neutral and rolling over

Hourly Chart:

Triple bearish divergence on the RSI chart with the recent spike at the New Zealand opening, and price dynamics looks pretty bearish as well. The last upswing has a weak base (or none at all), and stopped right at strong resistance near 1.2466. Look for a move below the hourly EMA10 in Asia, possibly a very sharp drop to the 1.2285 area. We’re at a critical juncture for the USD here, which is at major support levels in many currency pairs (e.g. USDCAD, GPDUSD). Overall, I expect the USD index to make new highs over the coming weeks, but will need to see confirmation for that first, for now it’s just a “big-picture hunch”.

Hourly Chart:

A sharp rebound at the European opening and break of 1.2350 was followed by an immediate move to the 1.27 extension at 1.24. Price is now consolidating a bit, but I expect a gradual move to 1.2465..75 eventually.

Currently sidelined since I missed the move I wanted to trade yesterday. Not interested in chasing what I consider the final push before the correction runs out.

Support: 1.2352 H-6-16   1.2241 HSppt   1.2200 L-6-15

Resistance: 1.2403 Fibo1.27 1.2452 H-5-28   1.2466 Fibo1.618

RSI: Hrly: bullish, Dly: bullish

Hourly Chart:

Stopped out at entry, sidelined for the rest of the day. Bearish momentum increases, expecting a move to 1.2260.

Stop tightened to entry, and target extended to 1.2460. Really needs to move up soon, otherwise I don’t want to be in the trade any longer. But there’s a good chance for a very strong move to 1.2466, which is the 1.618 Fibo extension and convergence of a prior trendline and upper channel boundary. But it may well be we see consolidation first and this move could happen tomorrow. Near the end of a good strong run and I prefer to be careful.

I went long on the recent retracement to the hourly EMA10 at 1.2296. Target is at 1.2398, just below the 1.27 extension near 1.24. Need to see the next hourly close above the hourly EMA10 to stay in the trade, otherwise momentum could easily shift to the downside. Stop at 1.2238, 15 points below the kangarootail. Good return/risk ratio on this trade with a lot of confirmation, and in the direction of the daily trend, which is admittedly bullish now.