Yesterday I said that EURUSD need a consistent move above 1.5150 resistance area to continue bullish towards 1.5300. The fact was, price never got higher than 1.5150 and bullish momentum was rejected. I was right at this point until price unexpectedly made further bearish momentum, fell below 1.5062, bottomed at 1.4959 and closed at 1.5006. I have to admit and realize that my technical study was completely a mess.

After broke above 1.5062 and topped at 1.5143 on Wednesday, I thought a movement towards 1.5300 should not be that hard. Well, my 1.5150 bullish target area was easily hit, but my second bullish target around 1.5300 was not. Technically the bias reverse to bearish, especially in nearest term with 1.4920 support area to be tested. Break below that support level should trigger further bearish momentum towards 1.4850/20 area, but as long as the bullish trendline support hold (see h4 chart below), the bullish scenario in longer term remains intact, especially if price able to break above 1.5062 today, testing 1.5150 area once again. Note that bearish reversal scenario warning is now can not be ignored especially if we have further bearish below 1.4820 with 1.4625 and 1.4450 as technical target. I think I will stand aside for now as situation is very tricky, but probably consider about open long position if price move near trendline support area or 1.4850/20 area today with tight stop loss.

On fundamental point of view, the risk aversion came back into play yesterday. Bloomberg reported that  Dubai World proposal to delay debts payment shook investor’s confidence.  Stocks in Asia, US and Europe dropped significantly while Yen and Dollar benefited from this situation.  Well, I think it’s the time that we should not be too optimistic about global economic recovery. It’s true that we have some significant improvement and have good reasons to be optimistic, but things are just still far from being stable and investor’s panic selling on Dubai World debts payment delay prove that. The Japanese Yen is the most currency appreciated in this situation, lead “safe heaven” currencies strengthen. However, I am concern about possible intervention by Japanese government to weaken the Yen as traders may respond to it thus potentially wane the Yen and Dollar rally.