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Traders Seeking Poor US number Print
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Written by Jason   
Sunday, 15 October 2006

thumb_gaspumpWith the July lows looming on the euro, and traders already bullish from earlier in the week, the near-term crowd approached friday's trading with expectations of a poor number out of the US session. Thus, traders were dependent on bad US data to drive the euro higher sufficiently providing them with an optimal exit to liquidate their positions ahead of the weekend. When retail sales numbers out of the US arrived below expectations, the single currency marched higher, but as traders started to assimilate the data, they omitted the recent drop in gasoline prices which left retail sales in a more sanguine picture. This became proof that indeed US consumers are spending what they are saving at the pump at stores. As a note though, expectations were mixed before the data was released leaving the direction of the aftermath reaction a foregone conclusion.

The recent price action of the euro validates our bearish view of the currency. Our target is currently 1.2400, with a break of this level leaving the currency pair vulnerable to 1.2230, our second target. On the upside, our bearish limit resistance is pegged at 1.2580.

Support & Resistance
 

 
EURUSD
GBPUSD
USDJPY
EURJPY
AUDUSD
R2 1.2580 1.8710  121.50  152.40 0.7635
R1 1.2540 1.8640  120.30  150.30 0.7560
S1 1.2480 1.8550  119.10  149.75 0.7480
S2 1.2400 1.8240  118.75  149.10 0.7420

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