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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Wall Street
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
Euro Attempting to Recover on Technical Bounce and Solid Data

Euro Attempting to Recover on Technical Bounce and Solid Data

Joel Kruger, Technical Strategist
  • Risk correlated assets finally finding some support
  • Moves classified as corrective consolidation at this point
  • Solid Eurozone data and positive news out of Greece help to inspire bids
  • Technical studies also warn of additional Euro gains before resumption of downtrend
  • German GDP strong, French and Eurozone weaker
  • German ZEW survey mixed
  • UK trade deficit weighs on pound
  • Portuguese GDP better than expected, but still problematic

Some intense liquidation in currencies, commodities and equities over the past several sessions looks like it might finally be ready for a welcome consolidation as market participants seek to buy back into risk at potentially attractive levels. While our core bias still favors additional risk liquidation into any corrective rallies, there is still a good deal of potential bounce before a resumption of risk off trade. So far on Tuesday, economic data out of the Eurozone has been well received overall, with solid German growth data, better than expected Eurozone GDP and an above consensus current situation to the German ZEW, all helping to prop. Meanwhile, auction results out of the region have been well received and investors have also found comfort with the added gift of a Greek promise to repay the Eur430M bond.

Relative performance versus the USD Tuesday (as of 10:35GMT)

AUD +0.40%

CHF +0.28%

EUR +0.27%

CAD +0.24%

NZD -0.03%

JPY -0.09%

GBP -0.27%

Technically, it is worth noting that EUR/USD are in need of an unwinding from oversold readings on the daily chart, and with the price stalling by a key 78.6% fib retrace off of the yearly low-highs (1.2810), we could be very close to seeing some form of a multi-session corrective bounce. Look for a break back above 1.2910 to confirm. But for the time being, the US Dollar is king, and market participants are likely to continue to look to buy the Greenback across the board on its lure of safety and a prospective narrowing in yield differentials as the US emerges first from the global crisis. Elsewhere, the Pound has been a relative underperformer on Tuesday, with the trade deficit numbers out of the UK weighing on the currency. Looking ahead, the US economic calendar is stacked and the data (see below) could very well influence the direction in the markets for the remainder of the day.


Euro_Testing_Key_Support_in_the_1.2800_Area_Look_for_Corrective_Bounce_body_Picture_5.png, Euro Attempting to Recover on Technical Bounce and Solid Data


Euro_Testing_Key_Support_in_the_1.2800_Area_Look_for_Corrective_Bounce_body_eur.png, Euro Attempting to Recover on Technical Bounce and Solid Data

EUR/USD: The market has finally cleared some key support by 1.3000 and the break opens the door for deeper setbacks over the coming days towards the 2012 lows from January at 1.2620. However, short-term technical studies will need to unwind from oversold readings before we are to see any extended declines below 1.2800, and we recommend looking to sell into rallies into the 1.3000-1.3100 where a fresh lower top is now sought. Look for a potential bounce by the 78.6% fib retrace off of the yearly low-high move which comes in by 1.2800. Back above 1.2910 confirms onset of corrective rally. But ultimately, only back above 1.3300 would delay.

Euro_Testing_Key_Support_in_the_1.2800_Area_Look_for_Corrective_Bounce_body_usd.png, Euro Attempting to Recover on Technical Bounce and Solid Data

USD/JPY: The latest pullback from the 2012, 84.20 highs is viewed as corrective and it looks as though the market could still see a bit more weakness before considering the possibility for the formation of a medium-term higher low. Overall, this is a market that has undergone a major structural shift in recent months and we now see the pair in the early stages of a longer-term up-trend. Ultimately, only a weekly close back under 78.00 would negate.

Euro_Testing_Key_Support_in_the_1.2800_Area_Look_for_Corrective_Bounce_body_gbp.png, Euro Attempting to Recover on Technical Bounce and Solid Data

GBP/USD: Finally starting to see signs of a medium-term top and potential 2012 high after the market has stalled and retreated from the 1.6300 area. Key support now comes in by 1.6050 and a break and close below this level will confirm bearish bias and accelerate declines towards 1.5800 further down. Ultimately, only a break back above 1.6300 would negate and give reason for reconsideration.

Euro_Testing_Key_Support_in_the_1.2800_Area_Look_for_Corrective_Bounce_body_usd_1.png, Euro Attempting to Recover on Technical Bounce and Solid Data

USD/CHF: Our core constructive outlook remains well intact with the latest setbacks very well supported by psychological barriers at 0.9000. It now appears as though the market could be looking to carve a fresh higher low, and the latest daily close above 0.9335 should accelerate gains towards the 2012 highs by 0.9600 further up. Ultimately, only back under 0.9200 delays and gives reason for pause.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email Follow me on Twitter @JoelKruger

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

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