Forex Trading | ClockworkFX - Euro Survives Negative Eurozone Data

Euro Survives Negative Eurozone Data

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Written by Jason

Wednesday, 18 October 2006

thumb_money The recent publication of the German ZEW survey during the euro session offered traders a chance to sell the euro; however, the release's credibility is questionable (the expectations element is a more suitable contrarian indicator for the German DAX). In the US session, a bigger-than-expected fall in the U.S. industrial production fueled market reaction, but curiously enough the market reacted very little to the capital inflows data, which hit an all time high. Speculation regarding Russian diversification (amounting to $7-8 billion) has been floating on trader's minds the past couple days and its significance for the euro. But the $116 billion inflow appearing in the TIC data was virtually disregarded. This fact alludes to strong confidence in the U.S. dollar or U.S. assets.

The euro's weak attempts to penetrate resistance have kept us unwavering in our bearish orientation. Our target remains the 1.2400 level and below that, 1.2230. On the upside, the 1.2580 level remains our risk-limit for a short.

Support & Resistance Table

	EURUSD	GBPUSD	USDJPY	EURJPY	AUDUSD
R2	1.2640	1.8825	119.90	150.10	0.7635
R1	1.2580	1.8760	119.50	149.65	0.7565
S1	1.2485	1.8640	118.10	148.70	0.7495
S2	1.2400	1.8550	117.40	147.85	0.7420

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