At the Open. It's crosses time.

09:45CET

Good morning everyone, hope you are fine. Just few days before Christmas time, but the market is showing some of its cards already. CHF and JPY crosses are the main dominant factors of the market at the moment, with EUR/CHF and EUR/JPY being the 2 crosses that I will focus my attention for today, as they are driving the EUR and most of the direct USD crosses as I write this opening post.

EUR/USD slipped back below the magnet line (broken support line that is not acting as resistance line but rather as a magnet line), and I believe it will be doing so for the time being unless an unexpected event occurs. GBP/USD is benefiting from the EUR/GBP sell-off (the unit hit a dynamic resistance line @ 0.8550 and tanked very fast), but it's getting close to extreme OB levels @ 1.5575, so I would not touch it on the long side for now, or even attempt fast contras if the high 1.55's are seen.

USD/JPY and USD/CHF are, as said before, dominated by the crosses, and therefore analyzing them may not be that important for the time being. However, it's important to note that the former has a 4hr divergence that is weighing on it and the latter is moving close to extreme OS level intraday @ 0.9640, where small longs might attempted.

STRATEGIES FOR THE DAY

EUR/USD - Sell above 1.3200-10 (we would find extreme OB levels there) and/or Buy below 1.3125 (we will find the extreme OS level there)
USD/CHF - Sell only above 0.9720 and/or Buy around 0.9640-30 as a fast contra with a few pips target
GBP/USD - Sell anything above 1.5570 as a fast contra for fast pips and attempt modest longs @ 1.5525 expecting the current intraday uptrend line to hold.

In other markets, AUD/USD and Gold are both rising today as the latter is testing key dynamic resistance off the recent highs, as the unit is trading @ $1,385. I'm still bearish there but I feel that a new breach of $1,400 might be catastrophic for my interests. Needless to say that the daily megadivergence there (even weekly now) is not paying off anything at the moment.

Before concluding this post, here's how retail traders are positioning themselves at this hour:

Dec 20, 2010 10:00 GMT+0100

   1. USD/JPY
      75.13% 24.87%
   2. USD/CHF
      71.65% 28.35%
   3. XAU/USD
      71.00% 29.00%
   4. USD/CAD
      65.33% 34.67%
   5. GBP/USD
      53.24% 46.76%
   6. EUR/USD
      49.80% 50.20%
   7. AUD/USD
      48.45% 51.55%

Posted via email from MT4