Forex: EUR/USD bid above recent 2-month lows
Forex pairs in this Article »
EUR/USD
FXstreet.com (San Francisco) - The EURUSD is trading just off recent 9-week lows this Friday after the European Central Bank president Mario Draghi overnight warned of a deeper economic downturn in the region. Spot slid as low as 1.2715 before the NA close and has since rebounded and traded to an intraday high of 1.2780.
As Valeria Bednarik, Chief Analyst at FXstreet.com comments in a recent analysis of EURUSD, "A break below 1.2710 will favor a quick fall towards 1.2660 area," she says. "The upside will remain capped as long as price stands below 1.2785 price zone." The market is last quoted in the 1.2775 price zone this afternoon in Asia.
Looking at the higher timeframes, we can see that EURUSD has found support at a descending trend line drawn from the peak of Feb 29 to that of April 2. A 38.2% Fibonacci retracement of the advance from July 24 to Sep 17 is also attracting buyers.
On the fundamental front, David Song, Currency Analyst at DailyFX notes the following: "Although the outlook for price stability remains 'broadly balanced,' there's growing speculation that the [ECB] Governing Council will target the benchmark interest rate to combat the deepening recession, and we may see the central bank continue to put its credibility and independence on the line as the governments operating under the single-currency become increasingly reliant on monetary support."
As Valeria Bednarik, Chief Analyst at FXstreet.com comments in a recent analysis of EURUSD, "A break below 1.2710 will favor a quick fall towards 1.2660 area," she says. "The upside will remain capped as long as price stands below 1.2785 price zone." The market is last quoted in the 1.2775 price zone this afternoon in Asia.
Looking at the higher timeframes, we can see that EURUSD has found support at a descending trend line drawn from the peak of Feb 29 to that of April 2. A 38.2% Fibonacci retracement of the advance from July 24 to Sep 17 is also attracting buyers.
On the fundamental front, David Song, Currency Analyst at DailyFX notes the following: "Although the outlook for price stability remains 'broadly balanced,' there's growing speculation that the [ECB] Governing Council will target the benchmark interest rate to combat the deepening recession, and we may see the central bank continue to put its credibility and independence on the line as the governments operating under the single-currency become increasingly reliant on monetary support."
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