{"id":4196,"date":"2009-10-06T15:27:30","date_gmt":"2009-10-06T20:27:30","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=4196"},"modified":"2009-10-06T15:27:30","modified_gmt":"2009-10-06T20:27:30","slug":"eurusd-strengthens-towards-september-highs","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/10\/06\/eurusd-strengthens-towards-september-highs\/","title":{"rendered":"EUR\/USD Strengthens Towards September Highs"},"content":{"rendered":"

By Fast Brokers<\/strong> – The Euro\u2019s relative strength is paying dividends today as investors exit the Dollar following a surprise 25 basis point rate hike from the RBA.\u00a0 We recognize broad-based weakness in the Dollar as a result, particularly against the Aussie and Kiwi.\u00a0 Additionally, gold has rocketed to new all-time highs, a negative catalyst for the Dollar.\u00a0 The RBA is the first central bank to raise rates following the massive flood of liquidity to abate the credit crisis.\u00a0 Therefore, we\u2019re witnessing the first reaction to the launch of global exit-strategies.\u00a0 What we see so far certainly doesn\u2019t bode well for the Dollar\u2019s longer-term future.\u00a0 The RBA\u2019s monetary decision is heightening speculation concerning the ECB and BoE meetings on Thursday.\u00a0 Last week Trichet made his first somewhat Dovish comments in quite some time by defending the interest of a stronger Dollar.\u00a0 However, the ECB has been comparatively hawkish throughout the downturn.\u00a0 Hence, there\u2019s little reason to believe the central bank will act in a Dovish manner on Thursday, particularly after the RBA raised rates in confirmation that the global economy is functioning in an acceptable manner.<\/p>\n

Despite the breakout in the AUD\/USD and gold, the EUR\/USD still faces multiple downtrend lines and September highs.\u00a0 The EU released only light econ data last week.\u00a0 Furthermore, the EU\u2019s previous wave of PMI data came in negatively mixed.\u00a0 Therefore, the EU economy is clearly facing headwinds in contrast to the RBA\u2019s enthusiasm.\u00a0 Hence, the EUR\/USD may continue to lag behind the AUD\/USD until the EU\u2019s data sends an \u2018all-clear\u2019, giving more room to the downside in the EUR\/AUD.\u00a0 Meanwhile, all eyes will be on U.S. equities and the 3rd quarter earnings season which kicks off tomorrow with Alcoa.\u00a0 Better than expected results particularly on the revenue side as a opposed to cost-cutting would be a positive catalyst for the EUR\/USD since the currency pair still shares a positive correlation with the S&P futures.\u00a0 Therefore, investors should keep an eye on the S&P\u2019s interaction with present resistances and September highs.<\/p>\n

Technically speaking, the EUR\/USD\u2019s recent movements have made a stronger argument for the near and medium-term uptrends.\u00a0 While the near-term key will be topping our three tight downtrend lines and previous September highs, the medium-term key is the psychological 1.50 level.\u00a0 If the EUR\/USD can break past these aforementioned technical barriers near-term gains could really accelerate.\u00a0 As for the downside, the EUR\/USD has a few more cushions to fall back on, including multiple uptrend lines along with 9\/25 and October lows.\u00a0 That being said, the EUR\/USD now has fewer technical obstacles to the topside than the downside.\u00a0 Additionally, breakouts in gold and the AUD\/USD bode well for the EUR\/USD over the near-term.\u00a0 Investors should keep a close eye on the EUR\/USD\u2019s interaction with its topside technical barriers, particularly as the ECB\u2019s monetary policy decision approaches.<\/p>\n

Present Price: 1.4745<\/p>\n

Resistances: 1.4747, 1.4768, 1.44784, 1.4800, 1.4818, 1.4840<\/p>\n

Supports: 1.4721, 1.4702, 1.4677, 1.4656, 1.4637, 1.4609<\/p>\n

Psychological: 1.50, September Highs<\/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 Euro\u2019s relative strength is paying dividends today as investors exit the Dollar following a surprise 25 basis point rate hike from the RBA.\u00a0 We recognize broad-based weakness in the Dollar as a result, particularly against the Aussie and Kiwi.\u00a0 Additionally, gold has rocketed to new all-time highs, a negative catalyst … <\/p>\n

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