Since the early days of Apr, even before 14-Apr’s 1.2653 high, we’ve backed off directional exposure given the market’s reversion to the center-half bowels of Dec-Mar’s 1.53 – 1.14-range where we approached the odds of aimless whipsaw as higher.  The market remains within these range-center confines, so further aimless chop may lie ahead.  But after more than a month of labored, corrective-type behavior, overnight’s nondescript break above last Tue’s 1.2297 high confirms a bullish divergence in very short-term momentum that defines 18-May’s 1.2079 low as one of developing importance and a micro risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can be objectively based and managed.

To be sure, today’s bullish divergence in very short-term momentum is of too small a scale to conclude anything more than another intra-range pop at this juncture.  Indeed, 14-Apr’s 1.2653 high remains intact as the key risk parameter the market needs to recover above to conclude the correction’s end and resumption of Mar-Apr’s uptrend that preceded it.  What today’s admittedly short-term bullish divergence DOES provide however is an early and favorable risk/reward entry into a bullish position that COULD end up breaking above that pivotal 1.2653 threshold and a specific and objective low, support and risk parameter on which to base a bullish punt.

Historically bearish levels in the Bullish Consensus (marketvane.net) measure of market sentiment have and continue to reinforce a broader base/reversal-threat environment.  These issues considered, traders are advised to move to a cautious bullish policy and exposure from 1.2300 OB with a failure below 1.2079 required to negate this call and warrant its cover.  In lieu of such weakness, we anticipate at least a return to the upper-quarter of the past couple months’ range and very possibly a bust-out above its 1.2653 cap.