Forex: EUR/USD retraces half of European plunge

FXstreet.com (Barcelona) - As time goes by and the market gets calmer after the European opening selloff as the ECB's President Mario Draghi spoke before the European Parliament, the EUR/USD bounce completed a 50% retracement of the plunge (from 1.2990 high to 1.2907 low) by reaching 1.2948, where the pair has been stabilizing ahead of US data and the NY opening.

Just released was the NFIB business optimism index that barely moved, down from 92.9 to 92.8 in September. The US Redbook is next, as well as IBD/TIPP Economic Optimism.

Despite yesterday's softening, Commerzbank analysts are unable to rule out a re-challenge of the 1.3173/77 band (recent high and the Fibonacci retracement/78.6% retracement of the move seen this year), but favor failure there. “Immediate support is offered by the 6 week uptrend at 1.2905, this guards the 2 month uptrend and 200 day ma at 1.2824/1.2738 – risk has shifted to the topside very near term however we expect it to remain fairly tepid”, wrote analyst Karen Jones.

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