News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • Talks between the EU and UK restarted today and will continue over the weekend as negotiators from both sides battle against the clock. Get your #currencies update from @nickcawley1 here: https://t.co/ER8IT1yxYO https://t.co/Jeeu2P9mwB
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/W9awqb818J
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/lucvsACxu5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/yywnE39MLU
  • The US Dollar is losing ground against ASEAN FX, with USD/SGD and USD/IDR possibly readying to extend declines. Will USD/PHP and USD/MYR follow? Find out from @ddubrovskyFX here: https://t.co/l705RWumj5 https://t.co/jBbMKYp0F5
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/YUhC9cCDpy
  • The US Dollar has spent much of October giving back September’s gains. Is there any hope for change? Get your #currencies update from @JStanleyFX here: https://t.co/3EHa6PV5yH https://t.co/PrP9J2klJk
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/UalZ8cRSXB https://t.co/wDVd2QvcjO
  • The longer-term EUR/USD outlook will hinge on Thursday’s ECB guidance; any hint of a further easing of Eurozone monetary policy would weaken it, but that is far from guaranteed. Get your #currencies update from @MartinSEssex here: https://t.co/RmHCfIwdqp https://t.co/hvETa6mtft
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true. Simplify your trading strategy with these four indicators here:https://t.co/A4dqGMPylo https://t.co/M8WTvZgx2K
Euro Finds Renewed Bids But Price Action Still Classified as Corrective

Euro Finds Renewed Bids But Price Action Still Classified as Corrective

2012-06-07 05:17:00
Joel Kruger, Technical Strategist
Share:
  • Risk correlated assets finding renewed bids
  • German plans to strengthen Spanish banks inspire confidence
  • ECB Draghi says the central bank is ready to act if necessary
  • EUR/USD next key resistance comes in by 1.2625
  • Bank of England rate decision due later today

Risk correlated assets have been very well bid over the past few sessions, with currencies and equities reversing sharply as market participants are able to let go of the worst of their fears for the time being. The doom and gloom sentiment that had taken hold in the previous week has faded and investors are once again warming up to the idea that the Eurozone may be able to escape the current crisis and avoid breakup. News that Germany is drafting plans to strengthen the Spanish banks without expecting further reforms or any formal aid deal has been seen as a huge positive and this has been once of the primary drivers of this latest risk-on trade.

Although the European Central Bank left policy on hold as was expected, comments from ECB President Draghi that the central bank is willing to act if necessary have also been helping to bolster sentiment. The Euro now eyes a retest and break of the previous weekly high by 1.2625, while the Yen has also been very well offered on the liquidation of safe haven plays. Still, at the end of the day, this is a market that had been in desperate need of technical correction following some intense risk-off moves, and at this point, we would attribute the recent price action more to the technicals than fundamentals.

European leadership will really need to dig in and come up with some serious plans to resuscitate the region for there to be any hope of a sustained Euro recovery. Until then, the strategy should be to look to sell these currency rallies into additional strength. Looking ahead, the Bank of England is slated for a rate decision later today. While no policy change is expected, there is a good deal of speculation that the Bank of England will shift to a more dovish stance in light of the ongoing pressures in the global macro economy.

ECONOMIC CALENDAR

Euro_Finds_Renewed_Bids_But_Price_Action_Still_Classified_as_Corrective______body_Picture_5.png, Euro Finds Renewed Bids But Price Action Still Classified as Corrective

TECHNICAL OUTLOOK

Euro_Finds_Renewed_Bids_But_Price_Action_Still_Classified_as_Corrective______body_eur.png, Euro Finds Renewed Bids But Price Action Still Classified as Corrective

EUR/USD:The market is in the process of correcting from some violently oversold levels after breaking to yearly lows just under 1.2300. While our overall outlook remains grossly bearish, from here we still see room for short-term upside before a fresh lower top is sought out. Look for the latest daily close back above 1.2545 to open the door for acceleration into the 1.2800-1.3000 area, where fresh offers are likely to re-emerge.

Euro_Finds_Renewed_Bids_But_Price_Action_Still_Classified_as_Corrective______body_usd.png, Euro Finds Renewed Bids But Price Action Still Classified as Corrective

USD/JPY:The latest setbacks have been rather intense, with the market collapsing through the 200-Day SMA before finally finding support by 77.65. We have since seen attempts at recovery and we contend that the market should continue to break higher, with sights ultimately set on a retest and break of the 2012 highs by 84.20 further up. However, at this point, we will need to see a break and close back above 80.00 to officially alleviate downside pressures and reaffirm bullish outlook.

Euro_Finds_Renewed_Bids_But_Price_Action_Still_Classified_as_Corrective______body_gbp.png, Euro Finds Renewed Bids But Price Action Still Classified as Corrective

GBP/USD: Daily studies are now well oversold and from here risks seem tilted to the upside to allow for a necessary short-term corrective bounce after setbacks stalled just shy of the 2012 lows from January. Look for the latest daily close back above 1.5440 to strengthen short-term bullish outlook, with acceleration projected into the 1.5600-1.5800 area where a fresh lower top will be sought out in favor of underlying bear trend resumption.

Euro_Finds_Renewed_Bids_But_Price_Action_Still_Classified_as_Corrective______body_usd_1.png, Euro Finds Renewed Bids But Price Action Still Classified as Corrective

USD/CHF: While we retain a broader bullish outlook for this pair, with the market seen establishing back above parity over the coming weeks, shorter-term risks are for more of a corrective pullback to allow for the market to establish a fresh higher low. As such, we see risks for weakness over the coming sessions towards the 0.9300-0.9500 area before the market looks to reassert its bullish momentum and broader uptrend.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES