Europe Open: Prices still consolidating, DAX leads the way for potential breakout.

EUR/USD H1

EUR/USD continues to trade within 1.28 to 1.30. From a technical perspective, EUR/USD is simply consolidating/directionless and there is no indication that it can go either way. However with an extended period of consolidation, the breakout that will eventually follow will potentially be huge as well.

GBP/USD H1

Cable has moved away significantly from it’s 1.63 long term resistance but the selling has stalled within a 50 pip consolidation range between 1.612 to 1.617. Similar to EUR/USD, everyday GBP/USD trades within this zone increases the probability of a greater breakout. For Cable the catalyst could come in the form of BOE announcement. Minutes of the previous meeting indicated that some MPC members saw reasons for more expansionary policies.

DAX Futures H1

After the strong rally on Monday, DAX manages to maintain most of yesterday’s gain and more importantly kept prices above the lows of 26th and 27th Sept. Prices could be pushing for another weekly high that will put bulls in control. However immediate resistance levels will be H5 of 7,410 and also 25th Sep High which could provide some resistance/relief for the bears.

FTSE100 Futures H1

Looking similar to DAX but not fully out of the consolidation zone that spanned from 26th Sep to 1st Oct. Targets for bulls to reach will be above Yesterday’s high while bears will be keen to keep prices below current levels.

Brent Crude H1

Also in the midst of trading within a consolidated range betwee 111.7 to 113.5. Talks about US releasing its SPR has quietened significantly the past few days, hence it is not surprising to see Brent not really creating significant strides in either bullish or bearish directions. With only broad risk trends potentially moving Brent this week, it is interesting to note that Brent is nowhere near 28th Sep highs while DAX and FTSE have already touched it and potentially move higher.

Bottomline:

Currencies, Equities and Oil are still mostly in a consolidation phase, probably due to exhaustion from QE3 euphoria and the subsequent hangover which saw prices drop from their post QE highs.  

 

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