???URO UPDATE – $EURUSD $6E_F

I was not able to post due to a mayor overhaul on my computers over the last few days, so this might be a longer post than usual.

Last update was exactly a week ago, right after a quiet Columbus Day. A quick review on some important issues back then.
At the time of writing, the €uro was on the verge of 1.29s. At that point, I was looking for a bounce that never really materialized in the POC (represented by the purple dotted line). Not even a small retracement, it flushed down the first area of previous buying action of 1.2918-1.2894 (stronger area) -as noted on Monday, Oct. 8th post– towards the line in the sand 1.2844-1.2880, noted on Sunday, Oct. 7th, in which buyers stepped in. Again, the latter area is key, as it provided buying interest for the last 3 weeks.

 

2012-10-16_22302012-10-16_2250

Buyers not only defended it, but stepped up to retest the other key area I was watching 1.2960-1.2980 from a while ago. Once that are was pushed by buyers, there was little resistance above. Specifically since it was a weak area, as explained in previous posts.

2012-10-16_2313

What I am trying to point out here, is some key areas that I´m watching which usually experience action (either on the buy or sell side), as you can see from the chart below. They are not perfect, but quite accurate nevertheless.

2012-10-16_23052012-10-16_2303

I will then clean-up the charts, but first wanted to gain some perspective and keep up for the lost time.

As I´m writing this post, Spain Investment grade rating has been confirmed by Moody´s, right after the US Market closed, which provided fuel for 75 pip rally in Euro into the Asia session. For those somwehat familiar with my blog, you are already aware about how much I respect vertical developments in terms of the intended direction of the asset in question. They tend to denote a change of character in the asset in question. The rally penetrated imporant areas of previous selling in an effortless manner, action which should be taken into account.

2012-10-16_2326

What to look for? I have marked some key areas I´ll be watching in the following sessions.

SELLING AREAS: The upmove stopped in an area where sellers have stepped up previously, as noted below 1.3118-1.3182 – specifically I´ll be looking at 1.3152, which is the POC, barely surpassed on the previous moves, before the retracement took place. Although overextended, the vertical development should have to be neutralized by an equally important move to the downside. Regardless, I would not be surprised to see a retracement, provided the overextension of the range

2012-10-16_23352012-10-16_2339

BUYING AREAS: 1.3062-1.3029 is weak area. The first meaningful area for buyers to defend is 1.2925-1.2978. Below, 1.2916-1.2890 & 1.2877-1.2848

2012-10-16_2347

Also, important to take into account are the POC´s, marked in purple.

 

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