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. See our updated Privacy Policy here.

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
Subscribe
Please try again
Oil - US Crude
Bullish
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
More View more
Real Time News
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqi8ZEe https://t.co/Gps2Xp32h9
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/hftCEho1lM
  • Gold price action is primed for volatility next week with the Fed decision on deck. How real yields and the US Dollar react to fresh guidance from Fed officials will be key for gold outlook. Get your weekly gold forecast from @RichDvorakFX here: https://t.co/MzaIl7tPmZ
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/rFlQtyQS81
  • Canadian Dollar snapped a three-week losing streak after USD/CAD stalled at key technical resistance. Get your CAD weekly forecast from @MBForex here: https://t.co/BPHuKecwnz https://t.co/73OmuCKfU9
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/KzhQnGiLyt
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/cuneuJNZlH
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/danCiP5vqK
  • 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/9S5tXIs3SX https://t.co/JhYoQ7I19K
  • The Nasdaq 100 index is aiming to breach a key resistance level at 14,950 for a second time. A successful attempt may open the door to further gains, although the MACD indicator flags signs of weakness. Get your equities forecast from @margaretyjy here: https://t.co/BEYupi32qB https://t.co/PWeXE8tZVY
Euro Shrugs Off Early Session Declines; Sights Set on Key 1.3300 Barrier

Euro Shrugs Off Early Session Declines; Sights Set on Key 1.3300 Barrier

Joel Kruger, Technical Strategist
  • Euro bounces by key hourly support
  • German GfK softer than expected
  • Swiss KOF exceeds consensus estimates
  • S&P downgrades Spain two notches to BBB
  • PM Rajoy comments contribute to early risk off price action
  • Yen sees whipsaw trade post new BOJ measures
  • SNB back in focus; keeping an eye on EUR/CHF

Well, it certainly didn’t take the markets long to shrug off the latest S&P Spain downgrade, downbeat comments from the Spanish PM and another batch of softer European data, with the Euro rallying from 1.3160 area European session lows, to trade all the way back above 1.3200. Overall, we would still recommend trading with extreme caution in these very tight but choppy, directionless markets. Despite the Euro pullback earlier today, the market still seems to be very well supported on dips (see hourly chart off 16April lows), and we would not rule out the possibility for a reversal back towards 1.3300.

Relative performance versus the USD Friday (as of 10:10GMT)

JPY +0.36%

GBP +0.20%

AUD +0.13%

CHF +0.05%

EUR +0.04%

NZD +0.02%

CAD +0.01%

We are very bearish EUR/USD once 1.3300 is tested, but at current levels, we remain sidelined. Ultimately, it will be attitude towards risk that determines market direction. Any pick up in risk appetite will be Euro and currency positive (USD and potentially Yen negative), while added fear and uncertainty will likely weigh on the FX markets and benefit the US Dollar.

Elsewhere, the Yen was subjected to some highly choppy whipsaw trade after the Bank of Japan announced additional monetary easing measures. Although the BOJ left rates on hold as expected, the Yen was sold off after the asset purchase fund was raised by Y10 trillion (net Y5 trillion as Y5 trillion fixed rate operation was reduced), and the maturity of the purchasing JGBs was extended to 3 years.

However, any initial Yen weakness on the announcement was easily absorbed, with USD/JPY more than giving back its post event risk rally. The broader macro theme of risk off trade proved to be the more influential market mover and perhaps sent a message that government action can not have any lasting influence on currency direction.

This offers a good segue into the subject of Swiss intervention, and we would remind investors to not forget about the EUR/CHF cross rate, which has been unable to establish any upside momentum beyond 1.2000, despite firm warnings from the SNB that the 1.2000 floor will be aggressively defended. The recent Yen rally post BOJ moves can not be comforting to the SNB, and just might provide enough ammunition for Swiss longs to ramp up their efforts. While we are not necessarily calling a EUR/CHF 1.2000 break today, we also will be keeping a close eye.

Finally, the Pound was well bid in European trade and managed to surge to fresh 2012 highs against both the buck and Euro. Cable jumped above 1.6200, and EUR/GBP dropped to multi-month lows below 0.8140. Fundamentally, talk of a potential rate hike made the rounds and may have helped to drive the relative strength, but technically, Sterling is starting to look a little stretched, and from here, we see risks for a reversal against both the Greenback and Euro.

TRADE OF THE DAY

Euro_Shrugs_Off_Early_Session_Declines_Sights_Set_on_Key_1.3300_Barrier_body_eur.png, Euro Shrugs Off Early Session Declines; Sights Set on Key 1.3300 Barrier

EUR/USD: Although the latest rally has been impressive, we contend the market is still locked within a more well defined medium to longer-term downtrend off of the 2008 record highs, and as such, looking to sell rallies in 2012 is the preferred strategy. The rally has now extended beyond 1.3200 and from here we see scope for additional upside towards 1.3300. However, once the 1.3300 level is tested, there is a very compelling technical argument to be made for a bearish resumption. A closer look at the 1.3300 level shows a confluence of resistance which includes the obvious psychological barrier itself, some falling trend-line resistance off of the February 2012 peak, the upper bollinger band, and a very attractive 78.6% fib retrace off of the most recent March-April, 1.34400-1.3000 high-low move. As such, we really like the idea of fading the strength to this area if it is tested today and will place our entry just over 1.3300. STRATEGY: SELL AT 1.3310 FOR AN OPEN OBJECTIVE; STOP-LOSS ONLY ON ANY DAILY CLOSE (5PM NY TIME) ABOVE 1.3410 (PREVIOUS LOWER TOP/MARCH PEAK).

ECONOMIC CALENDAR

Euro_Shrugs_Off_Early_Session_Declines_Sights_Set_on_Key_1.3300_Barrier_body_Picture_1.png, Euro Shrugs Off Early Session Declines; Sights Set on Key 1.3300 Barrier

--- 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