Forex: EUR/USD risks losing 1.29; Greece lose ends, US fiscal cliff weigh
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EUR/USD
FXstreet.com (Barcelona) - The losses in the Euro through Tuesday's trading reflects a market still reluctant to reinstate bid towards risky assets, despite Greece managed to secure more funding for the near future.
Recent price action in EURUSD, approaching London around 1.2920 technical support, showed a classic 'buy the rumour, sell the news' response to the Greece debt deal.
In-house strategist Valeria Bednarik notes: "There are a lot of flaws in the plan for Greece with several lose ends, and as discussed on previous updates, the EU just got some time before we start discussing a default, or a Grexit."
NAB observes: "It also reflects the fact that the IMF's continuing contribution to the Greek cause ostensibly remains subject to a successful Greek bond buyback operation to be completed before December 13, and the need for seven Euro zone nations to ratify the deal. The latter at least should be a formality given that no-one is being asked to stump up more cash"
On the US economic front, news were encouraging on Tuesday, as all the key data releases met or went beyond expectations. As Westpac FX strategist explains, "durable goods orders were better than forecast in both headline and all underlying measures, consumer confidence at 73.7 was up from an (upward revised) 73.1 last month and to its best level since February 2008, and the Case-Shiller 20-city average home prices is now 3% up on a year ago as of September, versus 2.03% in August."
However, one major concerns continues to be the uncertainty surrounding the US fiscal negotiations, hitting risk appetite, as Senate majority leader Harry Reid (D) crossed the wires to remind the market progress is slower-than-expected. In his own words, Mr. Reid said he was "disappointed" with "little progress" in ongoing fiscal discussions.
As NAB notes: "We have argued repeatedly that the Democrats and Republicans are quite a way apart and probably will remain so until the 31 Dec deadline instills a real sense of urgency to reach a deal on at least part of the "cliff"."
Technically, the EURUSD ended trading on Tuesday forming a bearish engulfing bar, "its first sound rejection off the key level" says Chris Capre, Founder at 2ndSkies, suggesting that short term talking, "the sellers are now in control."
Chris tips intraday support now resides at 1.2888, decent 'value-area' for longs to reinstate their bullish views. According to Chris, sellers "can look for intraday corrective pullbacks towards 1.3000 for potential shorts."
Valeria Bednarik thinks that an acceleration to next key support at 1.2880 is likely once 1.2915, Tuesday's low, is taken out. In words of Valeria, "below 1.2915, sellers will likely find some opposition around 1.2880, strong support over past October, yet if this last gives up, 1.2800 area seems a good target for this Wednesday."
Recent price action in EURUSD, approaching London around 1.2920 technical support, showed a classic 'buy the rumour, sell the news' response to the Greece debt deal.
In-house strategist Valeria Bednarik notes: "There are a lot of flaws in the plan for Greece with several lose ends, and as discussed on previous updates, the EU just got some time before we start discussing a default, or a Grexit."
NAB observes: "It also reflects the fact that the IMF's continuing contribution to the Greek cause ostensibly remains subject to a successful Greek bond buyback operation to be completed before December 13, and the need for seven Euro zone nations to ratify the deal. The latter at least should be a formality given that no-one is being asked to stump up more cash"
On the US economic front, news were encouraging on Tuesday, as all the key data releases met or went beyond expectations. As Westpac FX strategist explains, "durable goods orders were better than forecast in both headline and all underlying measures, consumer confidence at 73.7 was up from an (upward revised) 73.1 last month and to its best level since February 2008, and the Case-Shiller 20-city average home prices is now 3% up on a year ago as of September, versus 2.03% in August."
However, one major concerns continues to be the uncertainty surrounding the US fiscal negotiations, hitting risk appetite, as Senate majority leader Harry Reid (D) crossed the wires to remind the market progress is slower-than-expected. In his own words, Mr. Reid said he was "disappointed" with "little progress" in ongoing fiscal discussions.
As NAB notes: "We have argued repeatedly that the Democrats and Republicans are quite a way apart and probably will remain so until the 31 Dec deadline instills a real sense of urgency to reach a deal on at least part of the "cliff"."
Technically, the EURUSD ended trading on Tuesday forming a bearish engulfing bar, "its first sound rejection off the key level" says Chris Capre, Founder at 2ndSkies, suggesting that short term talking, "the sellers are now in control."
Chris tips intraday support now resides at 1.2888, decent 'value-area' for longs to reinstate their bullish views. According to Chris, sellers "can look for intraday corrective pullbacks towards 1.3000 for potential shorts."
Valeria Bednarik thinks that an acceleration to next key support at 1.2880 is likely once 1.2915, Tuesday's low, is taken out. In words of Valeria, "below 1.2915, sellers will likely find some opposition around 1.2880, strong support over past October, yet if this last gives up, 1.2800 area seems a good target for this Wednesday."
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