This week’s initial tentative buying dip scenario changed to more aggressive investor demand yesterday. Gains of more than a big figure drove EURUSD
to new 3 year highs and to the top of a rising Keltner
channel. After 5 consecutive up weeks, further gains mean that signals for sentiment are over-stretched especially after Asia kept this move going. This introduces a strong note of caution into our analysis although there is, as yet, no clear sign of exhaustion. Therefore, our call for this morning is a Very Modest Buy from 7am but leaving room to also Buy any Dip to 1.2411. The risk is Asia’s 1.2384 low with an immediate target of 1.2468. A move through that point then exposes sentiment to 1.2490 and towards 1.2541.