{"id":61569,"date":"2014-10-08T06:34:19","date_gmt":"2014-10-08T10:34:19","guid":{"rendered":"http:\/\/countingpips.com\/?p=61569"},"modified":"2014-10-08T07:33:39","modified_gmt":"2014-10-08T11:33:39","slug":"eurusd-gains-to-1-27-capped","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/10\/eurusd-gains-to-1-27-capped\/","title":{"rendered":"EURUSD: Gains to 1.27 capped?"},"content":{"rendered":"
October 8, 2014<\/div>
\r\n<\/div><\/div>

Article by ForexTime<\/a><\/p>\n

A lower quantity of economic data released from Europe has resulted in a quieter European session on Wednesday, with the majority of investors awaiting tonight\u2019s FOMC Minutes release.<\/p>\n

The only noticeable movement on the currency markets has so far consisted of the GBPUSD rejecting a prolonged stay at 1.61 for the second consecutive day, alongside further indications the Eurodollar doesn\u2019t have the legs to progress to 1.27. From a technical standpoint on the Daily timeframe, it appears that the EURUSD is currently consolidating inside its bearish channel after a period of heavy selling. It is also worth noting that potential runs to 1.27 have been capped by resistance between 1.2697 and 1.2673 for the past five successive days. A technical strategist might even suggest this consolidation period is just a correction for the next Eurodollar leg lower, which would allow the pair to continue trading within the same channel.<\/p>\n

The Eurodollar sentiment remains bearish and will likely require an unexpectedly dovish FOMC Minutes release for the EURUSD to advance to 1.27. Although there was widespread Greenback profit taking on Monday ahead of the release, there are no real indications that the FOMC Minutes will necessarily be dovish. We are probably not going to receive any timeframe hints from the Fed regarding when it will raise interest rates. In fact, if we receive formal wording tonight that Quantitative Easing (QE) will conclude in a few weeks\u2019 time and the markets rightly perceive this as a clear signal that although the Fed are not dropping a timeframe hint, it is moving towards normalizing monetary policy \u2013 we can\u2019t rule out the potential for USD strength tonight.<\/p>\n

If the Eurodollar is going to appreciate, we require USD weakness because the EU economic sentiment is bleak and unfortunately, it just seems to carry on getting bleaker. For example, concerns have emerged that the German economy might even contract in Q3. Over the summer period, German economic releases raised eyebrows but there\u2019s no doubting there has been an unanticipated deterioration in German data within the past fortnight. This has included an unexpected German manufacturing contraction, a decline in both IFO and ZEW expectations, alongside the largest German Factory Orders decline in five years. IMF Chief Economist, Olivier Blanchard expressed yesterday that \u201cgrowth in the euro area nearly stalled this year, even in the core\u201d and I look at this comment as a further signal that German performances are concerning.<\/p>\n

Additionally, fears of stagnant economic growth within Europe remain and inflation levels are dangerously low. It is still hoped that the weaker EURUSD exchange rate will improve EU economic fortunes but we are yet to see any correlation, and we might not until the end of the year. Overall, as long as the United States economy continues to naturally progress on a consistent basis, meaning the US economic sentiment remains intact \u2013 soft EU data will continue to awake the bears. ECB President, Mario Draghi suggested in August that \u201cthe fundamentals for a weaker exchange rate are better now than they were\u201d and he was right. As long as the divergence between the US and EU economy remains by the time the Fed concludes QE at the end of the month, we are looking at a 1.23 EURUSD valuation.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Written by Jameel Ahmad, Chief Market Analyst at FXTM.<\/b><\/p>\n

For more information please visit: Forex Time<\/a>\u00a0<\/b><\/p>\n

Disclaimer:<\/b> The content in this article comprises personal opinions and ideas and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/p>\n

Risk Warning:<\/b> There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice<\/p>\n

 <\/p>\n

\n

\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime A lower quantity of economic data released from Europe has resulted in a quieter European session on Wednesday, with the majority of investors awaiting tonight\u2019s FOMC Minutes release. The only noticeable movement on the currency markets has so far consisted of the GBPUSD rejecting a prolonged stay at 1.61 for the second […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-61569","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=61569"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61569\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=61569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=61569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=61569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}