EURUSD Maintains Medium Term Bearish Tone But With Caution.
Euro slides lower on dovish Draghi but what's next?
It was an eagerly awaited speech and the euro bears have not been disappointed
If the US Fed are preparing markets for a rate hike then it appears Draghi & Co are preparing us all for further easing on 3 Dec
Yesterday Ryan highlighted the latest ECB Minutes here and suggested they point to a definite easing in Dec
I'm not as bearish as some on the euro impact and neither am I as bullish as most on a Dec FOMC rate hike but then I've always tended to trade with a contrarian view. Being a dedicated follower of fashion has never been my style, in or out of the trading room!
For me the big question now is not whether the ECB or FOMC act or not but how much has been/continues to be factored in.
After all, this ( def the FOMC lift-off) is the longest waiting game of second-guessing that markets have experienced in recent times so if you want to buy USD or sell EUR you've had plenty of time. If the FOMC hike or the ECB ease it will take something extra-ordinary to accelerate these moves
As always we need to trade on fact not conjecture but in the real world this isn't how markets react and for the intra-day traders it's the speculation prior as well as the fact after that creates opportunity
I am looking at buying some cheap euros again but no need to jump in just yet. There will be time enough and I also think that EURGBP demand will ultimately help cap GBPUSD rallies again
No crystal ball or runes to back it up but the joy of these markets is the on-going scenario of good two-way business. What's not to like about that ?
As I type EURGBP is holding 0.6980-85 again and GBPUSD is slipping back toward the 1.5250-60 area with EURUSD rallying slightly to 1.0677 from lows again around 1.0665. Good support down there as saw yesterday in defence of some large option expiries.
EUR/USD: Euro Wilts to 7-Month Low, Ignores Strong Data The EUR/USD cross dropped into the $1.05 range on Monday, reaching seven-month lows as the dollar picked up pace despite relatively disappointing data from the US.
After trading at daily highs of $1.0655 on the back of strong European data, the pair later reached lows of $1.0592, before trading at $1.0618 late in the US session, a 0.26% loss on the day.
The prospect of a December rate hike as well as expansion of the European Central Bank's (ECB) monetary policy continue to weigh heavily on the pair.
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EURUSD: With EUR extending its weakness to close and hold below the 1.0673 level on Tuesday, further downside pressure is envisaged. This will leave its key support located at 1.0519 level as its main target. However, it could be looking for a temporary bottom after maintaining an intra day recovery tone during early trading today. On the downside, support lies at the 1.0600 level where a violation will aim at the 1.0550 level. A break of here will aim at the 1.0500 level with a turn below that level targeting the 1.0450 level. Its daily RSI is bearish and pointing lower, suggesting further weakness. Conversely, resistance comes at 1.0700 level with a cut through here opening the door for more upside towards the 1.0750 level. Further up, resistance lies at the 1.0800 level where a break will expose the 1.850 level. All in all, EURUSD maintains medium term bearish tone but with caution of a corrective recovery.