Quote of the day:“A timid person is frightened before a danger, a coward during the time, and a courageous person afterward.” - Jean Paul Richter
EURUSD – 1.4299 @06:47 GMT
Good morning. April’s lows are in focus as the euro continues to fall and no signs of a recovery can be seen yet. Even if it starts a stronger recovery, which is quite unlikely due to Greek problems and media hype, it shouldn’t get too far above current trading levels. Key near term resistance starts at 1.4550, followed by 1.4650, while in the lower side, notable support is seen at 1.4150 and 1.3900 (median retrace value of the full 2011 rally from 1.2870 to 1.4940). Intraday support at 1.4250 is intact but a potential breach below could open the door for further downside towards 1.40, providing a new selling opportunity. Looking at the hourly charts, we can see that all recent upside pullbacks had a range of about 100 points, which means that we can expect more selling on the potential pullback towards today’s open at 1.4370.
Trading strategy: looking to sell on the potential pullback to 1.4370, initial stop at 1.4420 (0.5% risk), target open
Support: 1.4250, 1.4150, 1.4000 and 1.3900
Resistance: 1.4370/00, 1.4450/75, 1.4550 and 1.4650
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – bearish
- EURUSD hourly chart 5-10-2011
- EURUSD daily chart 5-10-2011
have a good day!
I'd prefer to remain short USD but right now I don't see any reason to catch a falling knife (EURUSD)
If (and when) the dollar will resume its free-fall and I don't speak about some 100-150 pips retracement, I'll be happy to sell it.
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Hi Liviu,
when do you foresee a USD strength reversal, or resume its free fall again? Given the good data coming out of economic indicators from US, is not it the case the USD strength is here to stay for some more while.
On the retracement thing you mentioned, is it like you say Euro will see new highs against the Dollar? (like after reaching 1.40 and then re-starting the trend?)
Can you chime in your thoughts on this?
Cheers!
Hi Nik
I guess there'll be more dollar strength for a while, equities falling… setting up the stage for QE3.
When QE3 begins, dollar resumes decline. At least in theory, but the markets are always surprising
EURUSD reflects the dollar index and right now we have the dollar strengthening and EUR losing ground due to problems in Greece, perfect correlation to boost the dollar against euro.
No QE3 + more buzz about Greece = no reason to catch a falling knife at this point.
That's how I see it…