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Forex pairs in this Article » EUR/USD (Barcelona) - As EURUSD sets another record low for year 2012 in volatility terms, reading the ATR 14 indicator in a daily chart as it reaches as low as 78 pips on average for daily range in last 14 days, the pair is just where it was more than 32 hours ago in very early Asia-Pacific trade yesterday, that is, at 1.3170 last.

On top of this, the 1.32 in EURUSD round level seems frightening to break above it given almost everything derivative expires this coming weekend, and failure to do so would point to a retrace back to 1.31 round levels, says Independent Analyst Richard Lee: "EURUSD upside is being hampered by the psychological 1.3200 round figure. Given the short term consolidation on the session, probabilities are high for a turn in the five day win streak. Look for 1.3100 to be the first tested on the way down," the analyst suggests.

Little change in all USD across the board, with USD index showing a small decline of -0.06% for the day, despite improvement in risk aversion as US 'fiscal cliff' negotiations keep getting closer to a final agreement: "Republican leaders led by House Speaker John Boehner have conceded to allowing a tax rate increase of earners making a minimum of $1 million. The tax rate for income in that range would increase from 36% to 39.5% under the concession," notes Richard Lee.

Risk appetite though in the equity markets looks more promising, specially in Asia, with Nikkei index printing yet another higher high, last around the 9960 points figure near fresh 8 ½ month highs, +1.34% for the day, and breaking above descending trend line from early April 2010 highs. Australian ASX index prints fresh 2012 highs, all following the +1.19% SP500 Monday's advance.

Commodity markets also have been improving since yesterday with iron ore rising a +2.2% overnite and sitting at a +2% gain year to day following a +50% recovery in last few weeks, along with copper higher by +7% year to date, Gold at weekly highs, and oil at fresh 2-week high, last at $87.81 for light crude.

"Short term, although technical readings remain flat in neutral territory, the upside is favored as long as price holds above the 1.3125 area," says Valeria Bednarik, Chief Analyst at, "with scope to test 1.3250/80 if 1.3190 is taken," the analyst suggests, adding: "Below 1.3125 on the contrary, bearish correction may try to reach 1.3070 static support level," she concludes.
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