Kruger Insights Tuesday- December 10, 2013 by FirstMacro

BinaryOptionsNow | Published on December 10, 2013 at 11:34 am

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Entering Tricky Waters – Although USD/JPY remains very well bid and will probably break to fresh yearly highs (beyond the 103.70 May peak) over the coming sessions, I would still recommend proceeding with caution at current levels. Medium and longer-term, I remain aggressively bullish this major pair, but short-term, I still would not rule out the possibility for a sharp pullback to test previous triangle resistance now turned support in the 99.00-100.00 area. With this in mind, I would consider taking a shot at fading a move towards 104.00 in the hours ahead, but can’t offer a specific recommendation just yet. If we do in fact stall out and reverse in the short-term, this would also set up a pretty double top on the daily chart exposing a retest of the already mentioned previous resistance in the 99.00-100.00 region. While I do not believe the Yen to be a safe haven currency by any means, at the same time, the Yen still has the ability to find bids in risk off market environments. Given the expected capitulation in risk assets at any moment, this would support the idea that the Yen could once again find some bids (ie USD/JPY lower), at least in the short-term.

kruger insights december 10, 2013

No Better Time Than The Present – Elsewhere, continue to keep an eye on EUR/CHF. Another drop that takes us into the 1.2100’s should really get the SNB sweating and open the door to a lot of questions about the effectiveness (or lack thereof) of intervention as a longer-term stability measure. These questions will extend well beyond Switzerland and could very well manipulate sentiment towards other central banks, namely the Fed. I would also recommend watching EUR/USD today. I highlighted the 1.3720 fib resistance and the possibility that this level could be slightly exceeded. This has all played out now, and if we are going to reverse lower, it will need to happen today. Otherwise, the market is likely to break to fresh yearly highs beyond the October peak at 1.3835. Look for a break back below 1.3695 today to alleviate topside pressure and confirm exhaustion. Finally, I will be looking for an opportunity to take a third shot at selling the S&P. I was unsuccessful in two attempts over the past six months, but still believe strongly that a major corrective pullback looms. I will either sell on a rally to 1820 or on a break back below 1805. I will be looking for a correction of 10% at a minimum.

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