{"id":3817,"date":"2009-09-15T13:01:30","date_gmt":"2009-09-15T18:01:30","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3817"},"modified":"2009-09-15T13:01:30","modified_gmt":"2009-09-15T18:01:30","slug":"eurusd-dips-following-positive-wave-of-u-s-econ-data","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/15\/eurusd-dips-following-positive-wave-of-u-s-econ-data\/","title":{"rendered":"EUR\/USD Dips Following Positive Wave of U.S. Econ Data"},"content":{"rendered":"

By Fast Brokers<\/strong> – The EUR\/USD is heading south along with the GBP\/USD and gold while the USD\/JPY pops following a much better than expected wave of economic data from the U.S.\u00a0 Strength in the Dollar off of positive U.S. econ data is the opposite reaction of what we\u2019d normally expect.\u00a0 Therefore, we are witnessing an interesting alteration in sentiment as investors favor the Dollar due to comparative strength of the U.S. economy.\u00a0 We will monitor the correlation between the Dollar and the S&P closely over the next 24 hours to see if this reversal follows through.\u00a0 Meanwhile, The Euro is exhibiting relative strength against the Pound after BoE Governor King announced the central bank is leaning towards decreasing the deposit rate it pays banks on reserves, thereby increasing liquidity in the financial system.\u00a0 King\u2019s continual dovish attitude counters that of the ECB\u2019s Trichet, who has incessantly fought off the doves and maintained a relatively hawkish stance during the economic downturn.\u00a0 The ECB\u2019s steadfast behavior is paying dividends for the Euro as we witness a huge breakout in the EUR\/GBP.\u00a0 In fact, this appears to be a new leg up in the EUR\/GBP, indicating further strength in the EU vs. Britain over the near-term.<\/p>\n

The Euro is managing to exercise relative strength despite the fact that Germany\u2019s ZEW Economic Confidence number came in shy of analyst expectations today.\u00a0 However, even though Germany\u2019s number missed, the overall EU ZEW Economic Confidence data eclipsed expectations.\u00a0 Regardless of the mixed results, the ZEW Economic Confidence readings have recovered considerably and are nearing 2006 highs.\u00a0 Today\u2019s data helps confirm that the economic recovery continues to take root in the EU region.\u00a0 The Euro is benefitting from the mixed\/positive data in conjunction with the ECB\u2019s minimum bid rate holding steady at 1%.\u00a0 The EU will release CPI data tomorrow and we will watch closely to see whether the rapid decline in consumer prices can finally reach some form of stabilization.\u00a0 Positive CPI data would only help buoy the Euro more since this would allow the ECB to feel comfortable keeping their present liquidity measures in place instead of being pressured to fight off deflation.\u00a0 Meanwhile, it seems like the divergence in attitudes regarding monetary policy at central banks is resulting in more independent performance among the major currency pairs.\u00a0 We believe the divergence in correlations could persist over time since the central banks may take different approaches in regards to the process of unwinding their respective liquidity packages.\u00a0 Hence, investors shouldn\u2019t overreact to the collapse in the GBP\/USD today since Trichet and King obviously have their differences.<\/p>\n

Technically speaking, the EUR\/USD is still riding high off of last Tuesday\u2019s breakout to the topside.\u00a0 The currency pair continues to set higher lows while trading above the psychological 1.45 level.\u00a0 We still place significance on Tuesday\u2019s movement since the EUR\/USD leapt to new 2009 highs.\u00a0 There aren\u2019t any concrete, historical downtrend lines we can cross through present ranges.\u00a0 Hence, the medium-term uptrend is clearly intact.\u00a0 However, the 1.45-1.50 should continue to be a sticky range since there is quite of bit of historical trading in this range in late 2008.\u00a0 As a result, the EUR\/USD will likely need another jolt to break free of its topside obstacles.\u00a0 The next technical barriers are December 2008 highs along with the highly psychological 1.50 level.\u00a0 As for the downside, the EUR\/USD has Monday\u2019s lows along with the psychological 1.45 level.<\/p>\n

Present Price: 1.4590<\/p>\n

Resistances: 1.4591, 1.4607, 1.4639, 1.4672, 1.4710<\/p>\n

Supports: 1.4669, 1.4550, 1.4534, 1.4518, 1.4506<\/p>\n

Psychological: 1.45<\/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 heading south along with the GBP\/USD and gold while the USD\/JPY pops following a much better than expected wave of economic data from the U.S.\u00a0 Strength in the Dollar off of positive U.S. econ data is the opposite reaction of what we\u2019d normally expect.\u00a0 Therefore, we are witnessing … <\/p>\n

Continue reading “EUR\/USD Dips Following Positive Wave of U.S. Econ Data”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-3817","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=3817"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3817\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=3817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=3817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=3817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}