Wednesday, 2 May 2012

EurGbp, USDX and historical Pitchforks + Gold fails to impress.

EurGbp came back yesterday to retouch the underside of an important Mod Schiff median line that has become a pivotal support/resistance level and coincidentally lies at .8195 and at (or near enough) the 'psych' level of .8200. A simple Andrews fork (here above in blcak in the 15 min TF)on an uncluttered chart then showed a centre line touch failure in the 5 min TF and 'hey presto' we were off downwards in spectacular speed and style and have now made a LL. There is a rather peculiar/ tenuous head and shoulders (3o min TF) pattern that would have provided several short entries if you had not traded off the failure itself or even the spike up and through/retouch of  the long term ML seen here as the thick blue ML.Price has now bounced off it's 'trigger' (line A-C extended) seen here in pink.What really matter to me is how this recent price action looks on the 240 min and daily and weekly/monthly charts and it's pretty conclusive in my opinion. Incidentally I did not take a short or any position and have been watching this pair over the last week or two around this historical M-line for any sign of a reversal. I think price has made its intention clear but still wait for the break of the trigger line.
I surmise that we will now see further weakness in this pair and also EurUsd which i have deliberately avoided last week as its recent price action was not 'trader' friendly. Perhaps current fundamentals will now start to be reflected in this pair as well as against Cable. EZ Fundamentals that frankly scare the b'Jesus out of me & when one looks at current pricing around 1.3200 it could /should easily loose 300 basis points to reflect the current conditions. Certainly there seems little support/market structure on the EurGbp pair until .8060 and then .7700 but more worryingly are questions now arising over recent US data and what is going on with the S&P?

Last week and in the previous post i alluded to my recent bearishness and how i was coming round to the idea of continuing upward strength after the recent eye watering rally from 1354  and most importantly a clear breach of the previous high from this March of 1419.50 was needed .  The Dow has made a recent new HH and yet today we have seen the June S&P under 1400 and as i write at 1390.00 and at the CL of the grey fork ( see above).... To be honest this looks a tempting buy area and even with today's fall this market would need some shocking headlines and loss in confidence to break below 1380 where i would concede that my former bearish scenario is still in play. The RL's in the charts below have channelled price lower. If we come back to 1385 however there is support and that would still be under a 50% RT of the recent sharp move up from 1354 and i would also venture to find a long setup.

Lastly Gold: As per the previous post i was starting to see signs of support and thought that last Friday we might break out upto 1680 but we have failed at the same RL that has held price under 1680 on each recent successive move up since March this year. Medium term I am bearish but it looked as though we were going to make a higher high Frankly it looks weak and we have failed in the many up sloping Andrews forks that can be drawn in meaningful time frames. A break above 1669 would be bullish and consistant testing of 1650$ gives me concerns that we may go lower but at the moment I wait and watch.

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