{"id":3595,"date":"2009-09-02T10:55:00","date_gmt":"2009-09-02T15:55:00","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3595"},"modified":"2009-09-02T10:55:00","modified_gmt":"2009-09-02T15:55:00","slug":"eurusd-drops-quickly-despite-satisfactory-data","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/02\/eurusd-drops-quickly-despite-satisfactory-data\/","title":{"rendered":"EUR\/USD Drops Quickly Despite Satisfactory Data"},"content":{"rendered":"

By Fast Brokers<\/strong> – The EUR\/USD experienced a heightened selloff Tuesday despite the German Unemployment Change coming in below analyst expectations and the EU Unemployment Rate satisfying estimates at 9.5%.\u00a0 Instead of holding steady, the EUR\/USD plunged below all of our previous uptrend lines on climbing sell-side volume.\u00a0 The EUR\/USD was following crude and the S&P futures lower as global equity markets were under selling pressure.\u00a0 The mystifying part of yesterday\u2019s selloff in the EUR\/USD was the Euro\u2019s relative weakness compared to the Pound.\u00a0 The EUR\/GBP registered a sharp contraction even though Britain\u2019s Manufacturing PMI and Net Lending to Individuals data came in short of analyst expectations.\u00a0 Hence, one would expect further relative weakness in the Pound when the opposite proved to be true.\u00a0 What we can take from yesterday\u2019s currency interaction is that investors decide to snap up an oversold Pound and let the Euro ride with U.S. equities.<\/p>\n

The EUR\/USD is trying to stabilize today despite weak ADP employment data from the U.S.\u00a0 The EU\u2019s Revised GDP came in line with analyst expectations today, continuing the theme of solid data from the European region.\u00a0\u00a0 However, there has clearly been a shift of momentum towards the downside as investors begin to question the strength of the global economy recovery.\u00a0 Yesterday we saw large sell-side action in both the S&P and crude while the 30 Year T-Bond futures wrestle free of their July highs.\u00a0 The one odd correlative occurrence today is the large pop in gold.\u00a0 The precious metal has been positively correlated with the EUR\/USD, so gold\u2019s topside momentum is interesting.\u00a0 Meanwhile, investors should keep a close eye on the S&P\u2019s interaction with its highly psychological level.\u00a0 If the S&P gives up on 100 and heads towards August lows the EUR\/USD will likely follow.\u00a0 Considering the huge spike in volume yesterday, we believe the S&P could be in the midst of a sizable leg down.\u00a0 Therefore, it is becoming increasing difficult to be positive on the EUR\/USD for the near-term.<\/p>\n

We\u2019ve readjusted our trend lines to account for yesterday\u2019s volatility.\u00a0 The key will be for the EUR\/USD to hold out 1st tier uptrend line should it be tested.\u00a0 If our 1st tier uptrend line doesn\u2019t hold, a retest of August lows and the highly psychological zone is probable.\u00a0 The 1.40 trading zone would likely prove to be a solid cushion should the EUR\/USD decide to extend its pullback.\u00a0 As for the topside, bulls will look to keep the EUR\/USD 1.4200-1.4250 zone to try and create a new base.\u00a0 The EUR\/USD has added topside obstacles including our 1st-3rd downtrend lines.\u00a0 The EUR\/USD may opt to stabilize today considering the ECB will announce its monetary policy decision tomorrow.\u00a0 Even though the ECB is not expected to any drastic changes in its monetary policy, now would be an opportune time to administer a monetary shock considering the neutral outlook of analysts and the rising uncertainty among investors.\u00a0 In addition to tomorrow\u2019s ECB decision, the U.S. will release more ISM data and its weekly Unemployment Claims data along with a couple key releases from Britain.\u00a0 Therefore, the EUR\/USD certainly has enough data tomorrow to create a new bottom should the numbers impress.\u00a0 On the other hand, disappointing data would only add fire to the EUR\/USD\u2019s downward momentum.<\/p>\n

Present Price: 1.4210<\/p>\n

Resistances: 1.4225, 1.4236, 1.4251, 1.4271, 1.4282<\/p>\n

Supports: 1.4197, 1.4182, 1.4170, 1.4155, 1.4132<\/p>\n

Psychological: 1.40<\/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 experienced a heightened selloff Tuesday despite the German Unemployment Change coming in below analyst expectations and the EU Unemployment Rate satisfying estimates at 9.5%.\u00a0 Instead of holding steady, the EUR\/USD plunged below all of our previous uptrend lines on climbing sell-side volume.\u00a0 The EUR\/USD was following crude and the … <\/p>\n

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