{"id":2499,"date":"2009-06-16T07:39:05","date_gmt":"2009-06-16T12:39:05","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2499"},"modified":"2009-06-16T07:39:05","modified_gmt":"2009-06-16T12:39:05","slug":"eurusd-breaks-below-its-neckline-on-climbing-volume","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/06\/16\/eurusd-breaks-below-its-neckline-on-climbing-volume\/","title":{"rendered":"EUR\/USD Breaks below its Neckline on Climbing Volume"},"content":{"rendered":"

By Fast Brokers<\/strong> – The EUR\/USD broke below our neckline yesterday, logging the selloff we anticipated.\u00a0 Yesterday\u2019s move came on large volume, continuing the theme of considerable activity to the downside.\u00a0 So far this month we\u2019ve seen rising volume to the downside on 6\/4, 6\/5, 6\/10, and now 6\/15.\u00a0 The heightened interest on the sell-side could indicate there is more room to go to the south.\u00a0 In addition to snapping the neckline, the EUR\/USD closed beneath 5\/28 lows, another negative technical indicator.\u00a0 While we could see an immediate-term recovery towards our 2nd tier downtrend line and uptrend lines, we likely won\u2019t witness any sizeable, game-changing gains.\u00a0 The S&P futures also made a key technical pullback yesterday.\u00a0 Due to their positive correlation, the movement of the S&P further supports our negative outlook on the EUR\/USD.\u00a0\u00a0 It appears as if the next stop for the EUR\/USD could be our 1st tier uptrend line and\/or the 1.36 area.\u00a0 This would likely serve as the next point of consolidation should the currency pair decided to stabilize and turn around.\u00a0 As for the upside, the EUR\/USD would need to fight back above our 2nd tier uptrend line and the psychological 1.40 level on large volume for us to alter our near-term outlook.<\/p>\n

Meanwhile, the Euro continues to experience relative weakness across the board, emphasized by the deterioration of both the EUR\/GBP and EUR\/JPY.\u00a0 The weakness results from the comparatively spotty data from the EU during the recovery process.\u00a0 Additionally, investors could be showing the ECB has acted insufficiently in regards to their monetary policy in reaction to the economic crisis.\u00a0 Flight to the Dollar could continue as investors try to diversify and decrease their overall risk exposure.\u00a0 However, we do maintain our positive outlook for the medium-term.<\/p>\n

The medium-term downtrend line formed through 12\/18 lows, or our 1st tier downtrend line, is still far out of reach.\u00a0 As long as 1.35 in the EUR\/USD and the 900 area in the S&P are intact, the currency pair is in pretty good shape technically for the longer-term.\u00a0 On the other hand, we have yet to see if the pullback we\u2019re witnessing is healthy, or a reversal into the medium-term downtrend.\u00a0 Ultimately, the fate of the Dollar relies upon the outcome of the current economic stabilization taking place.\u00a0 If we are not witnessing a true recovery, then the Dollar would likely appreciate heavily once again.\u00a0 However, we would need to witness a large, broad-based contraction in economic data globally.\u00a0 Therefore, we maintain our negative near-term outlook and positive medium-term outlook on the EUR\/USD trend-wise.<\/p>\n

The EU will release key economic sentiment data along with its CPI number.\u00a0 The U.S. and Britain will release important economic data points of their own, so we expect another session of high volatility.<\/p>\n

Present Price: 1.3856<\/p>\n

Resistances: 1.3895, 1.3954, 1.4019, 1.4052, 1.4111<\/p>\n

Supports: 1.3847, 1.3807, 1.3759, 1.3724, 1.3682.<\/p>\n

Psychological: 1.40, 1.35<\/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 broke below our neckline yesterday, logging the selloff we anticipated.\u00a0 Yesterday\u2019s move came on large volume, continuing the theme of considerable activity to the downside.\u00a0 So far this month we\u2019ve seen rising volume to the downside on 6\/4, 6\/5, 6\/10, and now 6\/15.\u00a0 The heightened interest on the sell-side … <\/p>\n

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