{"id":4136,"date":"2009-10-02T10:23:41","date_gmt":"2009-10-02T15:23:41","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=4136"},"modified":"2009-10-02T10:23:41","modified_gmt":"2009-10-02T15:23:41","slug":"eurusd-declines-towards-1-45-with-slide-in-equities","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/10\/02\/eurusd-declines-towards-1-45-with-slide-in-equities\/","title":{"rendered":"EUR\/USD Declines Towards 1.45 with Slide in Equities"},"content":{"rendered":"

By Fast Brokers<\/strong> – The EUR\/USD has followed U.S. equities lower, dropping through our 4th tier uptrend line before tapping the psychological 1.45 level.\u00a0 Though the EUR\/USD bounced off of our 1st tier downtrend line, the currency pair continues to drift lower as strong bearish forces take control of the market as a whole.\u00a0 We point out key technical declines in the S&P futures and the GBP\/USD while the USD\/JPY continues to drag towards January lows.\u00a0 Additionally, the 30 Year T-Bonds broke out through September highs while gold and crude tipped lower.\u00a0 Therefore, the markets are beginning to act in unison and are re-establishing correlations we\u2019ve experienced since last year.\u00a0 EU econ data has been light this week, giving the currency pair more of an incentive to follow its positive correlation with the S&P futures rather closely.\u00a0 What little data we did receive from the EU provided little to cheer about.\u00a0 German Retail Sales came in 150 basis points below expectations and the EU unemployment rate printed in line with analyst expectations at 9.6%.\u00a0 However, fortunately for the Euro, the comparative lack of econ data has allowed the currency to recover its relative strength.\u00a0 The Euro is firming up against the Pound, and the EUR\/GBP appears poised to take a stab at September highs.\u00a0 Additionally, the EUR\/USD has the strongest technical backbone as compared to the GBP\/USD and USD\/JPY.\u00a0 Hence, even if the pullback in the S&P futures exacerbates and we witness a continual broad-based appreciation of the Greenback, the EUR\/USD has more reliable set of near-term defenses to help break its fall.<\/p>\n

That being said, the EUR\/USD has multiple uptrend lines along with the psychological 1.45 level serving as technical cushions.\u00a0 However, a failure of our 1st tier uptrend line would likely yield a much more protracted downturn.\u00a0 Fortunately for bulls, our 1st tier is quite a ways away, yet investors should still keep the level in mind.\u00a0 For the time being, a second drop through our 4th tier uptrend line increases the probability of a sub-1.45 movement towards our bottom-end supports and 2nd tier uptrend line.\u00a0 Meanwhile, the EUR\/USD should continue to follow its positive correlation with U.S. equities since the EU doesn\u2019t have a noteworthy data release until Monday\u2019s retail sales data.\u00a0 Even then, the Euro is looking at another dry week data-wise.\u00a0 Hence, correlations should be closely watched.\u00a0 The wild card in the deck is the ECB\u2019s monetary policy decision on Thursday.\u00a0 President Trichet made a semi-dovish statement for the first time in recent memory.\u00a0 Therefore, though the ECB may keep its present liquidity measures in line, investors will be looking for further evidence regarding the central bank\u2019s attitude towards the Dollar.\u00a0 Further defense of a stronger greenback could place some psychological downward pressure on the EUR\/USD.<\/p>\n

Our outlook on the EUR\/USD trend-wise is growing sour by the day.\u00a0 Our negativity stems from the blatantly negative performances of both the GBP\/USD and USD\/JPY.\u00a0 Additionally, the S&P futures finally gave way to the downside after persistent defense by the bulls.\u00a0 The most disconcerting aspect of the situations is the amount of room the Cable and USD\/JPY have to the downside.\u00a0 Should their last lines of defense give way, near-term declines could really pick up.\u00a0 Such a development would likely drag the S&P futures and the EUR\/USD with it.\u00a0 Therefore, investors should keep a close eye on the technical supports of the EUR\/USD\u2019s positive correlations.\u00a0 As for the topside, the EUR\/USD will need some positive unemployment data from the U.S. today to turn the tide.\u00a0 The EUR\/USD faces multiple downtrend lines along with Thursday highs.<\/p>\n

Present Price: 1.4541<\/p>\n

Resistances: 1.4563, 1.4584, 1.4608, 1.4630, 1.4656, 1.4677<\/p>\n

Supports: 1.4541, 1.4519, 1.4501, 1.4479, 1.4462, 1.4437<\/p>\n

Psychological: 1.45<\/p>\n

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

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong><\/span><\/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 has followed U.S. equities lower, dropping through our 4th tier uptrend line before tapping the psychological 1.45 level.\u00a0 Though the EUR\/USD bounced off of our 1st tier downtrend line, the currency pair continues to drift lower as strong bearish forces take control of the market as a whole.\u00a0 We … <\/p>\n

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