EUR/USD: 1.2433
The dollar is generally lower again today as concerns grow over the direction of global economic growth after another steep selloff in oil prices, which saw WTI fall towards $60 pb. Global stocks did not like it either and a general risk-off attitude has returned to the market, allowing the Euro to benefit today at the expense of the dollar as US/EU yield spreads narrow. Just how high the Euro can go is debatable, given the re-emergence of Greece as a major problem area in the EU, where political instability and the chances of a default appear to be growing.
There will be a fair bit of action later today with the EZ CPI’s, Targeted LTRO and US Retail Sales being the main focus, and from a technical perspective, the current squeeze on dollar long positions looks as though it may have the legs to take the Euro a bit higher.
The Euro is currently breaking above descending trend resistance, and beyond the minor double top high at 1.2446 will find further sellers at the 4 Dec high at 1.2455. Beyond there would see an acceleration towards 1.2500 and possibly towards the 26 Nov high at 1.2531, with the first major Fibo resistance not seen until we reach 1.2590 (23.6% of 1.3699/1.2246).
The downside will now find bids at 1.2400 and then at 1.2370 (200 HMA). A break of this looks unlikely today, but if the data dictates otherwise, then look for a run back towards 1.2340 (100 HMA) and then to 1.2300. Below 1.2300 will find buyers ahead of the trend low at 1.2246 although I cannot see this being bothered for a while.
Look for 1.2380/1.2500 to cover it today.
Economic data highlights will include:
EZ CPI (Germany, France), ECB Monthly Report, Targeted LTRO, US Retail Sales, Business Inventories, Jobless Claims.
Meta Trader – AxiTrader EUR/USD: 4 Hour
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