Technical watchers have pointed out the increased likelihood of a full retracement of the recent down move. The European morning rally saw key levels taken out. The 120.80 level was the downtrend line and 10-day and 21-day moving averages close to 121.00 were also cleared. The last leg higher saw stop losses triggered above 121.30/35, which was also the 61.8% fibo from the 122.20-120.00 move.
This opens up the topside and raises the risk of extended gains. Numerous accounts were involved in the move. Leverage funds and speculative accounts were encouraged by the laissez faire JPY remarks from BOJ's Haru, alongwith the receding G7 risk. The push higher gained momentum above 121.00, where momentum funds and models/CTAs came into the market.
Supply has been noted from a supranational account, also seen yesterday, and a stream of exporter offers. Overbought hourly studies may see pullbacks at increasing frequency, particularly with big accounts sidelined and price action largely driven by short-term/intra-day accounts. Once this feeds through the market we may see large size 121.80-122.00 offers come into play.
No comments:
Post a Comment