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Forex & CFD’s Price Action and Ichimoku Setups May 31st
So with the Bank Holiday yesterday and the muted price action, we felt to wait till today to start writing about new setups.
EURUSD – Daily Chart
So as we predicted last week and wrote in our post;
…the bottom of the Kumo is also parked right up against the 61.8% fib of the last major upswing so a taking out of both would signal more likely losses for the pair. However, should it hold, expect the pair to climb up within the Kumo and re-attack the 20ema
And that is exactly what happened as the pair held off the 61.8% and then climbed only within the Kumo as we anticipated attacking the 20ema. Now that it has cleared it and also held/tested it, next up is the Kijun which is flat at the moment, still catching up to the sharp bounce/climb over the last 4 out of 6 days. The pair should have some sort of rejection off this but should it break it and the Kumo, expect gains to continue with any 4/8hr close above 1.4520 accelerating gains up to 1.4754 before it will run into any major sellers.
AUDUSD – Daily Chart
Stuck between a fib and a kijun, this pair is showing stubbornness on both sides not being able to take out the fib below while not taking out the Kijun above. The battle lines have been drawn we suspect with these two fighting it out rock-em-sock-em robot style. For now, the pair is sitting just above the 20ema so traders should beware of buying here. Best to wait for the fib below which also is right around the Kumo top so double support could come into play there for a move back up to the 20ema and the Kijun. The red line above is what we think is an important line of defense for the bears – not necessarily the 300 at Thermopylae, and not as weak as Hadrian’s wall, more like Rommel’s 2nd battle at El Alamein. Part of what would make this critical is its not just the 50% fib from the years peak to the bottoming at 1.0500 – but its also clear of the massive Kumo which should offer upside support and possibly another push to 1.0900, maybe even 1.10.
Brent Sweet Crude – Daily Chart
As we can see by the triple rejection and price action off the 61.8% fib in the chart below, clearly there was buying interest in the ever diminishing commodity but the bounce has been so far unimpressive. Is it because of the tenuousness after the sharp sell-off, the reduction in buying of oil with consumers driving less and getting smaller cars or the recent call from the Saudi Prince for lower prices causing such a hesitation? To us, it really doesn’t matter but the instrument is clearly stuck between the 61.8% fib and the 38.2% which has rejected price nicely today. Oil will have to hold above the daily 20ema and break this fib for more buying to emerge. Ultimately, we feel oil is going higher and will likely retest the sub 115 highs in the coming 1-2mos, and likely make a run till the end of the year for 130/134 which does not bode well for drivers. Regardless, short term players can test the 38.2% above for short intraday plays targeting the 20ema and perhaps the ambitions 61.8% below. Buyers can take a close above the 20ema or another dip to 95.50 for moves higher to 103, 105 and 114. Long term we suggest holding longs and as scary as this sounds, its possible we could see +$200bbl oil by early 2012.
Hang Seng – Daily Chart
This one is actually a simple one as the 22500 – 24500 range has played out for some time, in fact pretty much all this year. Although it should be noted the sell-offs are much more tentative than the buy ups (which is usually counter to traditional moves) we feel the range should hold so if you are looking for a great 2000pt move, check out selling just shy of the 24500 with tight stops above targeting 1st sub 24000, the 23200 and 22500 where you can look for possible buys again. Expect a full move back down or up to take about 1.5mos+ but worth it if you can catch the move. Ultimately, we favor the long side a bit more than the short side but both are playable.
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