“Europe has found itself confronted with fresh challenges – challenges of a global character, the nature of which is directly connected with changes in the international climate and the difficulties of seeking new models for co-operation.” - Boris Yeltsin
Here’s a daily chart of EUR Index (euro against a basket of five major currencies: USD, GBP, JPY, CHF and SEK). As you can see, the uptrend is stable since breaking above 107 and every former resistance was a good level to buy on pullback, following the trend.
- EUR Index daily chart 3-30-2011 hollow candlesticks
And here’s the EURUSD chart, below – quite similar to the EUR Index chart above, but what’s quite interesting is that the EURUSD pullbacks to support zone are more violent. See the 1st pullback towards $1.34 – a bull flag formation meant to confuse those looking for a reversal there – starting to call $1.38 a top before the “imminent” decline to parity and below. Next leg up – same story. But let’s focus on current conditions – as you can see there’s a divergence between the EUR Index and the EURUSD which I believe is caused by current gains against JPY, GBP and CHF – but range bound / mixed trading against the USD (“wait and see” – Mode On)
- EURUSD daily chart 3-30-2011 hollow candlesticks
At least for now, the trend looks healthy to me. Until we’ll see the $1.400 broken – there aren’t many reasons to sell the EURUSD. Except for one’s ego need to catch THE very top if the EURUSD is due for a reversal here. Personally, as mentioned earlier today and yesterday, I am looking for some more buying opportunities if a potential break to the upside will be convincing.
Now let’s take a quick look at some other charts
EURGBP
As some of you already know, I’ve been looking for EUR to break higher against GBP – providing a good buying opportunity. Readers asked numerous times why I am often looking to buy high and sell low and my answer is simple: I am not afraid to follow the market instead of following my own thoughts (many times I think it’s worth catching falling knifes and I end up catching chainsaws, or stopping a gas balloon and I end up jumping on a rocket). I’m still having half position running after closing half at .8800 today, and will hold this one with an initial stop at .8690 (will look to buy more on break above .8820).
- EURGBP daily chart 3-31-2011
USDPLN
Support into the 2.8150-2.8250 region is still intact, so the last USDPLN setup stands valid. Potential breakdown below 2.8250 would open doors to last year’s low at 2.7260 or the 61.8% of 2.0165 to 3.9125, at 2.7500. There’s still a long way until the pair will turn bullish, eventually. Until confirming a bottom at current levels, I think it’s best to keep an eye on the support level for a breach lower.
- USDPLN daily chart 3-31-2011
EURJPY
After the disaster in Japan, I prefer to stay away from JPY pairs or place only small bets. I’ve kept my eyes on 115 for a while before the market collapse two weeks ago. Coincidence or not, it’s quite interesting that the pin bar at the beginning of March (scroll down to EURJPY) was a selling signal @115. We all know what happened afterwards:
- EURJPY daily chart 3-31-2011
Buying on pullback towards 115-115.50 is what I’m looking to do. Will keep you updated.
This is all for now, see you tomorrow.
