Temporarily Bearish from Mon’s 7am open below 1.2680
Supported by bullish momentum and 2nd positive weekly performance in a row was posted last week. This time gains were more significant and recovered the key Marabuzo line from 8 weeks ago as well as 38% of this year's decline. However these gains stalled near those important levels and Friday saw profit taking develop near the top of the daily Ichimoku Cloud. This setback is assessed as a temporary move but one that is likely to influence early trading this week. In view of this our call is Temporarily Bearish below 1.2680. The immediate objective is 1.2409, half of the gains from last Tuesday, and a move through that point should see the market focusing on 1.2342, that day's bottom, or even towards but probably not as low as, last week's 1.2295 base.
The risk is that selling pressure is more temporary than currently assessed and this would be confirmed by a move up through 1.2680, the 8-week high trade. Further gains would then target 1.2764, a broader 50% correction of the fall from Feb's peak, or even towards 1.2935, a 62% level.