{"id":2312,"date":"2009-06-04T09:16:51","date_gmt":"2009-06-04T14:16:51","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2312"},"modified":"2009-06-04T09:16:51","modified_gmt":"2009-06-04T14:16:51","slug":"eurusd-pulls-back-with-conviction","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/06\/04\/eurusd-pulls-back-with-conviction\/","title":{"rendered":"EUR\/USD Pulls Back With Conviction"},"content":{"rendered":"

By Fast Brokers –<\/span> The EUR\/USD is selling off again today following yesterday\u2019s pullback on substantial volume.\u00a0 Rising volume to the downside is an indicator that the pullback may carry some weight.\u00a0 With our 1.4117 support being tested, we could see further retracement towards the psychological 1.40 level.\u00a0 However, the EUR\/USD also has our 1st and 2nd tier uptrend lines to the downside.\u00a0 Therefore, the present pullback could still be a pattern of healthy behavior.\u00a0 Although, the rising volume on weakness is certainly a cause for concern, and raises a red flag.\u00a0 Hence, we recommend investors maintain a neutral stance until we see whether present supports can hold.<\/p>\n

The current selloff comes in reaction to weaker than expected employment and services PMI data from the U.S.\u00a0 More importantly, Fed Chairman Bernanke stressed the fact that the U.S. will need to limit further debt-creation and unwind the injections of liquidity as soon as possible to prevent the Dollar from experiencing a major destabilization.\u00a0 In other words, the U.S. may tighten its monetary policy sooner than investors expect.\u00a0 Bernanke is successfully changing the psychology of a rapidly depreciating Dollar, at least in the near term since we have seen the Dollar strengthen strongly across the board.<\/p>\n

Speaking of central banks, the ECB met today and kept its benchmark rate unchanged at 1%.\u00a0 The ECB is also standing pat on its level of liquidity injections including the 60 billion Euro purchase of covered bonds.\u00a0 However, the ECB is chaotic as usual, with dissenting viewpoints surfacing from its governors concerning future monetary policy.\u00a0 Therefore, the ECB meeting has left the EUR\/USD with a tinge of uncertainty as always.\u00a0 The EU is done with economic releases for the week, meaning the performance of the EUR\/USD will likely rely heavily on the U.S. equities.\u00a0 We\u2019ll get some more important unemployment data over the next two sessions.\u00a0 If the numbers disappoint, the EUR\/USD\u2019s retracement could pick up speed rather quickly.\u00a0 We have a negative outlook on the EUR\/USD in the near-term due to the large volume to the downside.\u00a0 However, the medium-term uptrend is still alive and well.<\/p>\n

Fundamentally, we find resistances of 1.4187, 1.4222, 1.4290, 1.4325, and 1.4374.\u00a0 To the downside, we see supports of 1.4117, 1.4078, 1.4024, 1.3987, and 1.3941.\u00a0 The 1.40 area serves as a psychological cushion with 1.45 acting as a psychological barrier.\u00a0 The EUR\/USD is currently exchanging at 1.4118.<\/p>\n

\"\"<\/a><\/p>\n

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong><\/span><\/a>.<\/p>\n

Disclaimer:<\/strong> FastBrokers\u2019 market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell\/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n

Risk Disclosure:<\/strong> There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Fast Brokers – The EUR\/USD is selling off again today following yesterday\u2019s pullback on substantial volume.\u00a0 Rising volume to the downside is an indicator that the pullback may carry some weight.\u00a0 With our 1.4117 support being tested, we could see further retracement towards the psychological 1.40 level.\u00a0 However, the EUR\/USD also has our 1st … <\/p>\n

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