Our support at 1.5600 was held in today’s trading, but there is still a ways to go, in terms of resistance, in order to make a serious push back to 1.6000.   It should take a break of the 1.5817 level in order to confirm the bull move.   We wouldn’t be surprised to see further congestion over the next few days though at these levels, which should build a nice level of support.   In the very short term we should see a retest of the 1.5700 level, and if that is held there should be another touch to the key 1.5817 level.   The move from 1.5300 to 1.5900 needed this correction with a limited retrace in order to build strength for the next push.   Bears need to break 1.5500 to gain control, don’t see this happening though in the current economic climate.  

The Sterling looked great today with a telegraphed bull move.   Our support was held at 1.9650 and produced excellent trading conditions for the bulls in this intraday session.   Bears would need to take out 1.9650 to gain control, but this looks doubtful with the breach of our 8 month trendline and retest to the top of it.   For now, 1.9765 should prove to be a level that if tested and held would produce enough strength to move back to 2.0000 and possibly beyond to 2.0246.   It sure would be nice to see this pair offer up some good medium term opportunities and bust out of this consolidation that has been driving all the traders I know MAD.

Bears sure were on parade today late in the U.S. session.   The U.S. markets had a hard time finding direction today, but when they did – it was in a big way.   Most major indexes lost around 2% pulling down the USD/JPY late in the trading day, which was inevitable after failing to push past 107.56.   I can’t really see this pair making any big moves the rest of the week though, due to the strong retrace after hitting 105.   It seems as though there will need to be a strong bear move to break the channel.   We remain neutral at the moment awaiting a breakout strategy in either direction.   There is still the possibility of a move to the 108.56 level that could produce a bull run and stay within the channel.