Have EUR/USD buyers had enough at 1.33 highs?
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EUR/USD
FXstreet.com (Barcelona) - With EURUSD last at 1.3210, breaking to the downside after being well contained inside its thin 10 pips trading of previous last 4 hours after bouncing from daily lows at 1.3187, market seems to have been taking a pause, as US 'fiscal cliff' negotiations have reached a point between a rock and a hard place. "Obama, Boehner continue stalemate on 'fiscal cliff'" could be read in USA Today late Wednesday's headlines. "Probably a few hundred billion dollars" makes the difference, the newspaper cited Obama saying.
"Market optimism vanished in a blink mid American afternoon, when the White House announced that it would veto Speaker Boehner's plan, announced yesterday as plan B. Stocks nose dive and market rushed to buy buck the greenback, right after the EURUSD reached 1.3307," said Fxstreet.com Chief Analyst Valeria Bednarik in her latest market report, calling for a "stronger downside move" in case 1.3185 EURUSD support does not hold.
Supportive of this potential deeper retrace are FXstreet.com Independent Analyst Richard Lee's words, noting that "A doji has appeared ahead of resistance via the 1.3300 round figure," the analyst said, adding: "As a result, the technical setup is portending towards a short term retracement, with bears likely to target the 1.3138 medium term support figure," Mr. Lee concludes.
At the same time, and for a longer term view, given last good news from the euro zone sovereign debt worries front coming to "a near-term end," Head of Currency Strategy at Westpac, Nick Bennenbroek says, "the market's focus will shift to economic fundamentals," the analyst points out, which, with "Lagging growth and easy monetary policy, will mean a declining euro trend in 2013," Mr. Bennenbroek suggests.
Reality is, with US 10 year notes facing again yields above 1.8%, unable to break above the 1.9% level since early May, and equity indexes around the globe at multi-month highs, lot of risk appetite improvement has been priced in, and USD index 79 round level providing strong support for last 5 months, given holiday season about to kick in, we might, why not, see some pause in recent moves. It does not mean the 1.9% yield level in the US 10 year note can't be breached higher, nor USD index 79 round level lower, but at least means for last 5 months there has not been found a reason to do so.
"Market optimism vanished in a blink mid American afternoon, when the White House announced that it would veto Speaker Boehner's plan, announced yesterday as plan B. Stocks nose dive and market rushed to buy buck the greenback, right after the EURUSD reached 1.3307," said Fxstreet.com Chief Analyst Valeria Bednarik in her latest market report, calling for a "stronger downside move" in case 1.3185 EURUSD support does not hold.
Supportive of this potential deeper retrace are FXstreet.com Independent Analyst Richard Lee's words, noting that "A doji has appeared ahead of resistance via the 1.3300 round figure," the analyst said, adding: "As a result, the technical setup is portending towards a short term retracement, with bears likely to target the 1.3138 medium term support figure," Mr. Lee concludes.
At the same time, and for a longer term view, given last good news from the euro zone sovereign debt worries front coming to "a near-term end," Head of Currency Strategy at Westpac, Nick Bennenbroek says, "the market's focus will shift to economic fundamentals," the analyst points out, which, with "Lagging growth and easy monetary policy, will mean a declining euro trend in 2013," Mr. Bennenbroek suggests.
Reality is, with US 10 year notes facing again yields above 1.8%, unable to break above the 1.9% level since early May, and equity indexes around the globe at multi-month highs, lot of risk appetite improvement has been priced in, and USD index 79 round level providing strong support for last 5 months, given holiday season about to kick in, we might, why not, see some pause in recent moves. It does not mean the 1.9% yield level in the US 10 year note can't be breached higher, nor USD index 79 round level lower, but at least means for last 5 months there has not been found a reason to do so.
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