Monday, May 30, 2011

EUR/USD 1,4289

Euro recovery from last week lows at 1.3970 halted at 1.4335 on early Asian session, -10 pips shy of May 20 high- and weighed by faltering risk appetite, the pair pulled back in Asia, dipping below 1.4300 to hit session lows at 1.4255 ahead of the European opening.

Below 1.4255 (day low), the pair might find support at 1.4185/00 (May 26 high/day low), and 1.4065 (May 26 low). On the upside, immediate resistance lies at 1.4300 (intra-day level), and above here, 1.4335/40 (day high/May 20 high) and 1.4425/40 (May 9/11 highs).

Technically, the pair lies at an important price area, according to Alberto Muñoz, analyst at "In the case of EURUSD, a strong close above 1.4300 would indicate we will have a bullish rally in the next days. On the other hand, a close below 1.4200 would mean the market is going to test recent lows."


Tuesday, May 24, 2011

EUR/USD 1,4105

Market's mood has flipped to risk-off again at mid American session, with commodities and stocks reversing earlier gains while currencies linked to commodities are retreating from session's highs against the Greenback.

The bounce of AUD/USD was capped by the 1.0580 resistance area during the NY session forcing the cross to pullback toward the 1.0530 zone where the fall was contained. At time of writing, AUD/USD hovers around 1.0540/50, 0.40% above its opening price while gold has retreated from $1527 an ounce to trade barely above $1520/oz.

The Loonie is also losing ground against the Greenback as oil erases previous gains. Crude for July has fallen to $98.50 a barrel after peaking at $100. USD/CAD has moved in sync to the upside, halting at the 0.9790 area where it is little changed since opening.

NZD/USD has backed away from 0.8014 where it set a fresh 3-week high and currently is trading around 0.7960.


Friday, May 20, 2011

EUR/USD 1,4167

The hegemonic currency faced another sell-off round after Fitch rating agency downgraded Greece from BB+ to B+ and after Norway suspended a EUR 25 million grant to Greece as this latter did not fulfill commitments and may have broken rules. The Norway's Foreign Ministry also said in a statement that Greece has to explain how the funds have been spent.

High volatility amid low volume persists in the FX market this Friday while commodities and stocks are reversing early losses.

EUR/USD sank below 1.4200 and hit the lowest price in 3 days at 1.4138 on the news, although it found strong support and has managed to trim part of today's losses. EUR/USD has recovered around 50 pips within the last hours and currently is testing the 1.4190/1.4205 area, former support, now resistance.

If the cross manages to break above, stops around 1.4210 could be trigger, exposing next resistance at the 1.4250 zone, while on the downside, below 1.4140, 1.4120/25 and 1.4050 are further support.


Wednesday, May 18, 2011

EUR/USD 1,4245

The Euro bounced up from 1.4120 low yesterday to regain lost ground in US session and breach 1.4250 resistance during Asian trade, to stall below 1.4285 during European session, with previous resistance area, at 1.4240/50 offering support so far.

Immediate resistance lies at the mentioned 1.4285 (day high), above here, 1.4340 (May 13 high) and 1.4425 (May 11 high). On the downside, support levels are 1.4230/40 (day lows), and below here, 1.4125 (day low) and 1.4080/85 (intra-day support).

On the longer-term, Ron William, technical strategist at MIG Bank, warns about a bearish engulfing pattern on the monthly chart, which threatens the bullish move of the previous 5 months: "1.4125 (day low), and below here, 1.4080/85 (intra-day support)."


Tuesday, May 17, 2011

EUR/USD 1,4209

Greenback lost momentum across the board as stocks recover ground in Wall Street. EUR/USD rose more than 60 pips in the last hour climbing back above 1.4200.

The pair soared after hitting a daily low at 1.4120 and reached a new high at 1.4235. To the upside the Euro might face immediate resistance around 1.4245 where yesterday’s high lie.


Monday, May 16, 2011

EUR/USD 1,4126

Euro recovery from Friday's low at 1.4045 is a mere correction, meant to be capped below 1.4190, according to Stoyan Mihaylov, technical analyst at, before next leg downwards, towards 1.3730.

Saturday, May 14, 2011

EUR/USD 1,4119

The Euro was the worst performer among majors in the market for the second week in a row. EUR/USD fell 270 pips after plummeting 520 pips on the previous week. The pair reversed sharply on Friday and tumbled from 1.4340 and bottomed at 1.4065, hitting a 6-week low. The European currency finished on Friday hovering around 1.4100 weakened by risk appetite and worries about debt problems in Greece.

“The Euro has been moving in lock-step with equities recently (as well as oil) and so the risk-off trade was in full effect as the EUR/USD fell through the 1.41 area. With lingering concerns about what happens with Greece yet to be decided by EU members, traders do not want to hold EUR”, said Nick Nasad, fundamental analyst at FXtimes.

Regarding Eurozone debt problems, the Danske Bank affirmed in its weekly report: “Greek finances seem unsustainable, and the risk of restructuring – which could lead to losses in the European banking sector and a sell-off of EUR – is ever-present. However, our euro economists expect further loans to be extended to Greece, so avoiding or at least deferring such a scenario”. They anticipate some normalization of the EUR risk premium in the coming months. “In this context, it should also be noted that our short-term model for EUR/USD, which is based partly on relative interest rates, gives an equilibrium exchange rate above 1.46”.


Thursday, May 12, 2011

EUR/USD 1,4224

The Euro was rejected yesterday at 1.4425, and the pair fell sharply on US session, breaking below 1.4270, which according to Stoyan Mihaylov, technical analyst at, confirms the end of the corrective recovery from 1.4253, reactivating the downtrend towards 1.4020 support area.


Wednesday, May 11, 2011

GBP/USD 1,6394

Pound's retreat from 1.6420 high yesterday found support at 1.6315 on US session, and the pair picked up , to consolidate between 1.6345 and 1.6385 during Asian session, half way through the weekly range.

On the upside, immediate resistance lies at 1.6385 (session high), and above here, 1.6405/20 (May 9/10 highs), and 1.6465 (May 6 high). On the downside, below 1.6445 (session low), next support levels lie at 1.6315 (May 10 low) and 1.6270 (May 9 low).

Technical indicators suggest intraday upside moves for today according to the, technical team: "Stochastic provided positive signals support the intraday upside move today; the upside move requires b breaching 1.6455 and stability above 1.6300."


Tuesday, May 10, 2011

EUR/USD 1,4373

Euro retreat from Asian session high at 1.4375 has found support 100 pips lower at 1.4270, and the pair bounced back favoured by the positive opening of European markets, regaining previous losses and returning to 1.4375.

On the upside, above 1.4375, the pair might find resistance at 1.4440 (May 9 high) and 1.4575/90 (May 6 highs). On the downside, immediate support lies at 1.4250/70, (May 9 low/day low), and below here, 1.4200 (April 18 low) and 1.4155 (April 17 low).

EUR/CHF found support at 1.2485/00 area to bounce up strongly at European session opening, surging about 130 pips to test resistance at 1.2630, which so far, remains intact, as the pair pulled back top 1.2570/80 area.


Sunday, May 8, 2011

EUR/USD 1,4320

The EUR/USD suffered one of the worst 2-day loss in history. The pair traded at 1.4900 on Thursday and finished the week around 1.4350. The decline started with Trichet words singling that the ECB is not going to raise rate in the next meeting and on Friday, rumors about Greece leaving the Eurozone accelerated the decline.

The pair bottomed in the last day of the week at 1.4313, 620 pips below weekly highs reached on Wednesday at 1.4933 when it traded at the highest level in 17 months. The Euro was the worst performer during the week among majors.

In the Eurozone, Greece denied that it is considering leavening the euro. There were also speculations about a debt restructuration. “Pending the substantiation of this speculation, the euro will remain under pressure; but it will also hold off from a major run”, said Senior Currency Strategist from Daily FX, John Kicklighter.

A confirmation that Greece intends to leave, would send the euro sharply lower according to the Daily FX analyst. “Alternatively, putting to rest this speculation could lead to a temporary bounce that unwinds this morning’s losses. However, that doesn’t mean that it will recover any more ground than that; as traders now realize that the market is highly sensitive to concerns over the region’s financial stability”, Mr. Kicklighter added.

“The euro sell-off could continue on further position unwinding – especially if the correction in commodity prices runs further – and even lower levels in EUR/USD in the short term cannot be ruled”, analyst at the Danske Bank wrote in a report before the Greece news hit the wires. They concluded that in the short term the pair could continue to go lower if the indications that the global economy is slowing down spreads to equity markets, but they still see the underlying trend for a higher EUR/USD. “Hence, on the back of ECB hikes and easy monetary policy in the US, we will look for attractive levels to reposition for renewed upside”.


Tuesday, May 3, 2011

EUR/USD 1,4775

Euro rally was capped yesterday at 1.4900, fresh 16-month highs, and the pair moved back from severely overbought stochastics, according to Carol Harmer, technical analyst at Charmer Charts, suggesting the possibility of further retracement over the coming sessions.

The pair, coming up from lows at the moment of writing, is expected to remain capped by 1.4885/00, which according to Harmer, offers a good selling opportunity: "Short term we are looking oversold, but this is to be expected given the move lower from 1.4900, so we may well see s small bounce early in the session, and this would give us a chance to re-sell this market. We look to sell at around 1.4885/1.4900 and we would only stop ourselves out if we broke the 1.4925 area."

On the mid term, the pair remains overbought, prone to a pull back, according to Harmer, who points out to 1.4585 and 1.4560 support levels: "However, we are overbought on the med term charts and therefore this is alerting us to the market taking a bit of a tumble. 1.4585 to 1.4560 offers us support and we look to cover shorts to here."


Monday, May 2, 2011

European markets rise on Bin Laden's death

European markets have opened the week on a positive tone rising to their highest level in the last two months, buoyed by Bin Laden's death and better than expected manufacturing activity figures in the EU. In currency markets, Euro and Pound pick up after Asian session's Dollar rally.

Eurostoxx 50 Index rises 0.3%, while the German DAX Index advances 0.8% and the French CAC Index adds 0.35%. In the UK, the FTSE Index remains practically flat two hours after the opening bell.

Appetite for risk has increased on Asian session following news of Bin Laden's killing by a CIA operation in Pakistan, and boosting hopes for the resolution of geopolitical tensions in the Middle East.

In the macroeconomic front European Manufacturing PMI increased to 58.0 in April from 57.5 in March, beating experts expectations of a weaker increase to 57.7.

Dollar giving back gains

EUR//USD retreated from 1.4865 high on Asian session, following news of Bin Laden's killing, to find support at 1.4760, and pick up on early European session, to regain 1.4800 reaching 1.4825 area at the moment of writing

GBP/USD recovery from 1.6620/25 low on Friday was capped at 1.6740 on Asian session, and the pair dropped to 1.6640 after Bin Laden death, to bounce up on early London session, reaching 1.6700.

USD/JPY dipped to fresh one-month lows at at 81.00 on early Asian session, and the pair bounced up stronly following Bin Laden's death, to stall at 81.70 right below Friday's high.