Tuesday, September 9, 2014
Sunday, September 7, 2014
Published in: EUR USD Forecast EUR/USD: Do you remember 1.2740?
1.31 and 1.30 vanished like a cloud in a
strong wind with the heavy artillery launched by ECB on Thursday, and
not even a very weak US NFP employment report was enough to reverse
course: the American economy created just 142K new jobs in August, well
below the average of the year around 230K, enough for the EUR/USD to
spike up to 1.2988, before giving up back towards current 1.2960 price
zone. I found some pretty, non back-checked data in my twitter, that
says that over the last 3 years, August Payrolls have been revised up by
90K average over the past 3 years. Would that be the case? We won’t
know until next month, but anyway worth mentioning.
Anyway, between dollar strength and EUR weakness, the EUR/USD trades at its lowest level in over a year, and conserving how shallow the bounce was today despite the data, I would dare to affirm that risk remains to the downside in the pair. Are there any likely reasons for the pair to revert? The only one I can came out with now is that all of the sudden, the FED changes its speech, and skips or reduces the amount of facilities to taper below the $10B in its meeting this month. Any other recovery will be probably short lived and mostly seen as a selling opportunity rather than the beginning of a more sustained recovery.
A few days ago, I draw my line in the sand to the upside in the 1.3220/40 area, the unfilled gap from a couple weeks ago and past week highs, but now I would lower it down to 1.3100/20 price zone: as long as below it, bears will maintain the lead. A correction higher should not be disregarded, considering the large amount of shorts reported in last week COT report. And educated guess would suggest those increased to new highs this week, so if price somehow recovers above 1.3000, then 1.3100/20 area may come at sight.
But for the most a break below 1.2920 this week low, is favored towards next strong midterm support, 1.2740: the level has been repeatedly containing the downside during the first half of 2013, and I do believe market players would love to give it a try. A break below it seems unlikely for next week with a lighter calendar, but if somehow price manages to edge below it, 1.2625 January 2012, comes next.
Anyway, between dollar strength and EUR weakness, the EUR/USD trades at its lowest level in over a year, and conserving how shallow the bounce was today despite the data, I would dare to affirm that risk remains to the downside in the pair. Are there any likely reasons for the pair to revert? The only one I can came out with now is that all of the sudden, the FED changes its speech, and skips or reduces the amount of facilities to taper below the $10B in its meeting this month. Any other recovery will be probably short lived and mostly seen as a selling opportunity rather than the beginning of a more sustained recovery.
A few days ago, I draw my line in the sand to the upside in the 1.3220/40 area, the unfilled gap from a couple weeks ago and past week highs, but now I would lower it down to 1.3100/20 price zone: as long as below it, bears will maintain the lead. A correction higher should not be disregarded, considering the large amount of shorts reported in last week COT report. And educated guess would suggest those increased to new highs this week, so if price somehow recovers above 1.3000, then 1.3100/20 area may come at sight.
But for the most a break below 1.2920 this week low, is favored towards next strong midterm support, 1.2740: the level has been repeatedly containing the downside during the first half of 2013, and I do believe market players would love to give it a try. A break below it seems unlikely for next week with a lighter calendar, but if somehow price manages to edge below it, 1.2625 January 2012, comes next.
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