We saw reasonable range expansion yesterday, with the pair trading between 1.3732 to 1.3648. Personally I would be a seller on rallies from here and would look at working offers into the 1.3780 area, with a potential stop loss at 1.3875 (just above the 61.8% retracement of the recent sell-off). The bond market seems key for all markets right now and any prolonged low volatility will encourage further inflows in Spanish and Italian debt, subsequently causing renewed EUR strength. There are signs however that the pair could be headed to the 1.3300 to 1.3400 over the next couple of weeks. The neckline of the double top comes in at 1.3672 and a close below here would target a move just below 1.3400.
We have now seen the June uptrend give way, however support has been seen at the 50% retracement of the March to May rally at 1.6730. Short positions are preferred, but I still prefer shorting EUR/USD or EUR/GBP on rallies from here.
Traders sold small caps and high growth names once again overnight, with increased volatility and a further bid in bonds front and centre. Keep an eye on a potential close below 3418, as this is the neckline to the multi-month head and shoulders pattern. In theory this pattern would target a move of 10% lower.
WSA has been the star performer in the ASX 200 this year, but is it time for the bulls to book some profits? It seems that could be the case, with LME (three-month) nickel falling 6.4% yesterday, taking the metal down 13.3% from its recent high of 21,625.