The recent collapse in the EURUSD is probably the beginning of a larger decline that could reach 1.35 in the next few months. Still, markets do not move...
After two weeks of congestion, the US 2Q GDP revision numbers will bring volatility and the potential for renewed trends.
Euro Dip-buyers Seek Bullish Reasons
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Written by Jason
Tuesday, 17 October 2006
The EURUSD's rallied was capped at 1.2540 yesterday before softening up again. Traders initially sought guidance from the slate of Fed speakers, however; Bernanke's address and the Fed's Poole and Yellen failed to be a catalyst for the euro. Following the Fed line-up, the Empire State survey revealed an increased headline number, but the focus of that survey fell to the drop in raw materials prices. The Euro's close proximity to the July lows, as well as the 200 daily moving average is a favored buying approach for traders. In addition, some traders sought a more clever reason for the euro's latest rally - the account that central banks of Golf states' will be meeting in a month to consider the addition of a unified currency in 2010. There is a fear that a consolidation could end the dollar's peg against each single currency in the region.
The upside move on the euro managed only a meager 1.2540, therefore our target remains 1.2400. Failure of this level would expose the euro to our second target of 1.2230. Risk-limit to the upside is again slated at 1.2580.
The EURUSD's rallied was capped at 1.2540 yesterday before softening up again. Traders initially sought guidance from the slate of Fed speakers, however; Bernanke's address and the Fed's Poole and Yellen failed to be a catalyst for the euro. Following the Fed line-up, the