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EURUSD
Trading strategy: stand aside
The euro is currently recovering some lost ground, testing offers at 1.4900. Intra-day sentiment is slightly bullish but stronger resistance levels are seen a bit higher – at 1.4950/55 and 1.5000. On a short-term basis – a break above 1.5000 is needed to confirm that the drop to 1.4820 was corrective in nature. Current exchange rate is 1.4888 @07:00 GMT
GBPUSD
Trading strategy: stand aside
Already up by 0.35% for today, cable also tries to advance higher, recovering Friday losses. Short-term momentum remains bearish, favoring selling into rallies, as long as 1.6700 is intact – while on the downside, a resume of the decline would open 1.4270/00. More upside price action is likely, for now. Current exchange rate is 1.6485 @07:00 GMT
EURUSD
Despite several attempts to breach higher last week, the euro failed to hold gains as the dollar rallied across the board on Friday, as a result of better than expected unemployment figures. The 270 points decline of Friday has cleared half of euro’s gains accumulated during the previous two months, hence December started by favoring the dollar bulls. Is this the time of a prolonged correction? Could be… but I maintain my positive view on EUR against the buck, for now, treating such declines as potential opportunities to re-initiate EUR long positions. Speaking of current market conditions – short-term sentiment is slightly bearish due to recent rejection into the 1.5150 region along with Friday’s collapse below the 1.49 handle, back into the key support region around 1.4850. A rising trend line support coming from July’s low at 1.3830 has been reached and limited intra-day losses but in case of the decline’s resumption within the coming trading sessions, we should focus towards the next support levels – into the 1.4700/30 and 1.4600 regions. In case of a recovery, which at this moment seem more plausible to me, I expect the 1.5000 mark, along with 1.5050, to provide a minor barrier – a lot weaker than before (during October and November). A sustained breach above the 1.5 handle would also turn momentum positive, signaling that the correction is over. Also keep an eye on the S&P500 as important levels are still intact into the upside – the 1113 barrier which is still intact, despite several attempts to breach higher along with false breaks/spikes to as high as 1119. Another key barrier is the median retracement of the long-term decline from 1576 to 666.75 which is set at 1121. Due to the solid correlation between EURUSD and S&P500: no sustained break above 1113 -> no breach above the 1.5100/50 region, simple as that.
EURUSD
Trading strategy: stand aside
Downside pressure intensifies as the US Unemployment Data favors dollar’s recovery – printing 10% down from 10.20%, while the Nonfarm Payrolls came at a surprising -11k Vs. -115k consensus. As I mentioned in my morning article, from my experience – Fridays use to be positive for the dollar, either due to profit taking before weekends (in EURUSD up trends), either by low liquidity a few hours before US session close, or for various other reasons, more or less random. Although current drop in EUR is notable, we are far from calling it a trend reversal. On an intra-day basis, more downside is likely – while the EUR may face barriers on extended rallies towards former support into the 1.5000/50 range. Current exchange rate is 1.4948 @14:25 GMT
GBPUSD
Trading strategy: stand aside
Cable also suffers after its last upside attempt, falling for 135 points – back below the 1.66 handle, I’d say enough to clear most of the weaker stops. While 1.67 is intact, expect more of the same ‘sell into rallies’ habit. Although it is recovering while writing these lines, the danger of more downside action is still near and I feel that 1.6400 will be a decent bearish target within the coming days – if not today, but you never know… However, I call it a day and will be back in the weekend, updating my short-term outlook article.
Have a great weekend, folks!
Quote of the day: The way to get started is to quit talking and begin doing. – Walt Disney
EURUSD
Trading strategy: stand aside
Downside is under pressure after the euro failed to breach higher, past 1.5145, on yesterday. The decline in equities favored the pullback into the 1.5050 support region and intra-day sentiment remains negative as long as 1.5100/15 is seen in the upper territory. Extended losses below 1.5045 may bring this week’s lows around 1.4975 in focus. As mentioned in my previous article – while a sustained break above 1113 in S&P500 does not occur – the euro will remain in-range below 1.5150. We’ll see if equities recover later today and also don’t forget that today is the NFP day. Anyway, I reckon that Fridays are usually dollar positive, although I don’t have statistics but this is what I noticed during the last years. Current exchange rate is 1.5052 @06:13 GMT
Support: 1.5045, 1.5000, 1.4950/75 and 1.4850/00
Resistance: 1.5100/15, 1.5145/50 and 1.5200
- Continue reading: Daily analysis and trading strategies 12-04-09
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