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Forex: EUR/USD keeps flirting with 1.29; soft dip buying so far...

FXstreet.com (Barcelona) - After falling like a rock, there seems to be few courageous buyers willing to catch a falling knife in the early European session. EUR/USD has fractionally broken through 1.29 only to stabilize right above it.

Despite the fall may be interpreted as an opportunity to buy on dips after the excessive 160+ pips down-gap, looks like big players are delaying the timing of any counter-trend entry, as the proposed deposit tax in Cyprus set a 'dark' precedent for the rest of peripheral countries within the Eurozone, thus some may find a better option wait until the dust settles.

"While authorities deny the possibility of extending the measure to other troubled economies of the EU, investors’ confidence has not exactly increased with these measures" says Valeria Bednarik, chief analyst at FXstreet.com.

Valeria adds: "The EUR/USD trades at 1.2904, fres year low, with technical readings distorted over the opening gap. The bearish momentum however, will likely extend if the pair extends is slide, with stops gathered below 1.2880 strong static support: once below this last, the pair may reach 1.2800/40 area over the short term."

On the upside, as mentioned in a prior article, there is a major gap that bargain hunters will try to fill up, with 1.2960/70 (triple bottom since March 1) ahead of 1.30 as tough areas to overcome.

Cyprus bank deposit tax to be voted on Monday

After early reports suggested that Cyprus's parliament would decide on Sunday the fate for thousands of small savers in the country, whose deposit are being threatened with a hugely injustice 6.75% tax on deposits as part of a deal struck between the Eurozone and the government, final talks were postponed until Monday, Reuters reports.
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Forex: Two main Cyprus themes weighing on the Euro

Here is a little tip for FXstreet.com readers. As observed in the charts, the Euro has fallen without mrcy from last week's 1.3106 high to now threaten 1.29 and what is even worse for the interest of Euro buyers, the trigger of reported stops below 1.2870/80. For now though, the 1.29, while marginally breached, still sees buying interest.
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