EURUSD: We should be seeking selling opportunities

Market Snapshot:

German's growth has slipped from 0.7% to 0.3% whilst France's economy shrank by 0.1%. Meanwhile Italy is now within it's 9th consecutive quarter within recession, and although Spain too are still within recession their contraction has lost pace.

Things are more rosy in the UK after the Bank of England forecast a 0.9% expansion in the final quarter of 2013. If so then this will be their strongest quarter since the middle of 2010. However UK mortgage lenders have returned to their pre-crisis methods of lending to borrowers with smaller deposits. This in turn raises the fear of repossessions if house prices start to fall.

We are fairly light on news today and will not see a 'red news release' until tomorrow during the RBA Monetary policy meeting minutes.

EURUSD DAILY:

The Euro has seen a modest recovery of +220 pips in comparison to the -538 pip sell-off seen prior to this. Also when you look at 'time and price' relationship between the two movements it does strongly suggest that gains seen last week are merely corrective, therefor we should be seeking selling opportunities and for price to make a new low beneath 1.3280.

At time of writing we are trading just beneath a good confluence of resistance which comprises of the 50eMA, the 38.2% retracement and a previous price cluster which formed around the end of September. These 'clusters' I refer to are where price trades sideways for period of time, and there is a lot of overlap amongst the candles. If these areas are revisited in future they tend to act as a temporary S/R zone - we are now trading within this prize zone so I will count this as another confluence of resistance.

GBPJPY INTRADAY

View previous Analysis:

- 7th November

- 15th November

This pair was definitely one of the cleaner chart from last weak, as the breakout above the neckline to confirm the Inverted Head & Shoulders pattern has since provided ample of opportunities to get long on the intraday timeframes.

Whilst momentum is waning slightly and the pullbacks have been very shallow (borderline non-existent) even if we do get a pullback to a support level the bias will remain bullish as we have a target around 164.50.

159 and 160 have strong confluences of support so any pullbacks to these levels may provide excellent buying opportunities to trade back upto 164.50 on the H4 or D1 timeframes.

GOLD INTRADAY:

View today's post for the larger picture

We are just managing to trade beneath the 1290 resistance where we have met the pivotal S/R level and the upper channel of a declining channel. Should this level continue to hold then the preference is to keep to the short-side with any bearish setups around resistance areas.

A break above 1290 opens up 1300, 1310 and 1330 consecutively.