EURUSD,H1
EURUSD has come off the boil of logging a two-week high at 1.2510. Option related selling has been in the mix, helping drive the pairing below 1.2480. The dollar has also staged something of a broader rebound, which has seen USDJPY climb above 108.50 and tip lower from two-week highs. Recent dollar declines, notably in the cases against the yen and Australian dollar, have come despite markedly favourable shifts in the U.S. buck’s yield advantage, but this also is generating market narratives about buying dollars for the longer term. Much will depend on global asset market performance. If risk-on conditions persist in the face of heightening Fed tightening expectations, then the dollar will likely remain on a downward path as investors seek out higher beta, higher yielding assets. But if we see fresh bout of risk-off, the dollar is likely to rally.
The EURUSD, today is at nearly full retracement from the drift seen the first week of February, therefore despite the strong Euro and the weakness seen on US Dollar, in short term is likely to see the pair making a correction from the sharp rally seen since yesterday. The key level however in order to claim that the downwards correction scenario is indeed possible is a break of the intra-day support at 1.2440-1.2450 area, which is the area of the last 2 low fractals seen in the hourly chart. A break below this area, will triggered a short position with targets at the low Bollinger Bands pattern and the 61.8% Fibonacci Retracement level, at 1.2420-1.2400 area. Intra-day Momentum indicators are mixed, with Stochastic slopping lower, indicating negative momentum, while AMCD remains positive since February 9th.
Oppositevely, with the bigger picture remaining bullish, a hold above this support area mention above, will give the confidence of another test higher up to the January 25th and February 1st highs at 1.2537 and 1.2523, which are the highest levels seen since December 2014, provide the upside targets. Daily momentum indicators indicate the continuation of the upwards movement.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.