Forex: The EUR/USD closes the week below 1.3200; Time for bears?
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EUR/USD
FXstreet.com (San Francisco) - The Euro lost almost all its weekly gains versus the US Dollar and close at 1.3180 after knocking the 1.3300 doors in the past December 19 and 20. On Friday, the EURUSD was pressured by the fiscal cliff drama and Plan B cancellation with the stock market suffering its biggest drop since November 14.
"Considering that EUR is a risk currency many traders may be wondering why it is holding strong," points BK's analyst Kathy Lien. . And she believes that "one of the reasons why EURUSD has held up so well is because concerns about the U.S. Fiscal Cliff have not taken a big toll on European stocks."
"The bullish momentum is lost in the 1H chart with the RSI being able to break below 40. However, a break below 30 is needed to be a sign of bearish momentum," comments Fan Yang, FXTimes analyst. "Looking a the consolidation range again, note the middle is around 1.3245. A hold below this area can be a sign of bearish intent, while a break above 1.3250 gives a bullish bias to the sideways consolidation."
Yang believes that "If price falls below 1.3180 and the RSI below 30, it is likely a start of some bearish correction. Also note that this could be assessed as a double top, which introduces a short-term correction."
The FXstreet.com banks, brokers and independents forecast poll shows similar sentiment about the the EURUSD, which remains bearish in middle and long term. It seems recent gains haven't impressed market players.
On the upside, EURUSD needs to regain at least 1.3240 to ease the immediate pressure while a rally through 1.3300 would open the doors for a rise toward 1.3385 as immediate bullish target.
"From a short-term point of view, EURUSD's sell off through the latter part of the week does leave a bit of a dent in the rally. But the underlying trend momentum in this market remains very strong and that should limit EUR weakness", says TD Securities team. "Indeed, there has not been much follow through below the 1.32 support area and the market remains inclined to buy EUR dips it seems".
The Santa's week ahead
The next five trading days, and the last week of the year is expected to experience low volumes but wide and erratics movements as market wil be focused on fiscal cliff resolution and maybe a deal in the 11th or maybe, the 25th hour. However, investors must pay attention to the following events:.
Finland Christmas Day (Dec 25 all day) Santa is coming to town!
1. Japan Unemployment Rate (Dec 27 23:30 GMT, 8:50 JST)
2. BoJ Monetary Policy Meeting Minutes (Dec 25 at 23:50 GMT, 8:50 JST)
3. US Consumer Confidence (Dec 27 15:00 GMT, 10:00 ET)
4. US New Home Sales (Dec 27 15:00 GMT, 10:00 ET)
5. US Chicago Purchasing Managers' Index (Dec 28 14:45 GMT, 9:24 ET)
Happy holidays!
"Considering that EUR is a risk currency many traders may be wondering why it is holding strong," points BK's analyst Kathy Lien. . And she believes that "one of the reasons why EURUSD has held up so well is because concerns about the U.S. Fiscal Cliff have not taken a big toll on European stocks."
"The bullish momentum is lost in the 1H chart with the RSI being able to break below 40. However, a break below 30 is needed to be a sign of bearish momentum," comments Fan Yang, FXTimes analyst. "Looking a the consolidation range again, note the middle is around 1.3245. A hold below this area can be a sign of bearish intent, while a break above 1.3250 gives a bullish bias to the sideways consolidation."
Yang believes that "If price falls below 1.3180 and the RSI below 30, it is likely a start of some bearish correction. Also note that this could be assessed as a double top, which introduces a short-term correction."
The FXstreet.com banks, brokers and independents forecast poll shows similar sentiment about the the EURUSD, which remains bearish in middle and long term. It seems recent gains haven't impressed market players.
On the upside, EURUSD needs to regain at least 1.3240 to ease the immediate pressure while a rally through 1.3300 would open the doors for a rise toward 1.3385 as immediate bullish target.
"From a short-term point of view, EURUSD's sell off through the latter part of the week does leave a bit of a dent in the rally. But the underlying trend momentum in this market remains very strong and that should limit EUR weakness", says TD Securities team. "Indeed, there has not been much follow through below the 1.32 support area and the market remains inclined to buy EUR dips it seems".
The Santa's week ahead
The next five trading days, and the last week of the year is expected to experience low volumes but wide and erratics movements as market wil be focused on fiscal cliff resolution and maybe a deal in the 11th or maybe, the 25th hour. However, investors must pay attention to the following events:.
Finland Christmas Day (Dec 25 all day) Santa is coming to town!
1. Japan Unemployment Rate (Dec 27 23:30 GMT, 8:50 JST)
2. BoJ Monetary Policy Meeting Minutes (Dec 25 at 23:50 GMT, 8:50 JST)
3. US Consumer Confidence (Dec 27 15:00 GMT, 10:00 ET)
4. US New Home Sales (Dec 27 15:00 GMT, 10:00 ET)
5. US Chicago Purchasing Managers' Index (Dec 28 14:45 GMT, 9:24 ET)
Happy holidays!
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