Richard Perry
Independent Analyst
The euro recovery was turned on its head yesterday as the Federal Reserve sought to calm nerves over the potential for rate hikes. Despite the FOMCC remaining relatively dovish the dollar strengthened as financial markets settled down again. This has pulled EUR/USD sharply lower again, with an almost two big figure range on the day from high to low. This has undone much of the recovery work that the euro had been putting in and we now see a change of outlook once more. This will often be the case with ranging periods and that is what the euro has been doing for the past 6 weeks. The intraday hourly chart shows a move below the support at $1.2357 which has opened the support area around $1.2300 and is likely to mean that a retest of $1.2245 is also on the cards. History tells us that over the past 6 weeks we should play the range and until it breaks down there is little use in turning all out bearish again.
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