OctaFX | OctaFX Forex Broker
Open trading account
Back

Forex: EUR/USD uncomfortable below 1.30, further definition needed

FXstreet.com (Barcelona) - The EUR/USD drop from a 2 ½ month high above 1.32 to currently trade at a 5-week low in only a matter of 6 trading days defines the story of the pair, where erroneous seesawing conditions have surely frustrated traders trying to pick the right value levels to profit from short term moves.

However, the haro move down in the past 2 days, while not as conclusive from a technical point of view, as the breaks in AUD/USD, USD/JPY or to a lesser extent GBP/USD, is worth noting as it provides some interesting clues on sellers possibly starting to take some control over the exchange rate.

As Valeria Bednarik, chief analyst at FXstreet.com, notes: "The bearish potential has increased, and while some consolidation, or even upward corrections could be expected today, the pressure remains to the downside."

Meanwhile, Marc Chandler, head of currency strategists at BBH, thinks that by looking at the US-German 2-year interest rate differential - EUR/USD often tracks the rate -, despite the recent loss in Euro value, "the premium the US offered over Germany - currently near the lower end of the range that has confined it since early April - supports the case for a consolidative phase."

Marc suspects that "during this period, a euro bounce into the $1.3030-60 area may offer a new selling opportunity, with the bigger picture still point for the euro to retest the year's low near $1.2750 in the second half of Q2" he adds.

Session Recap: USD extends gains; Gold takes a hit

The USD resumed the upside today above the 102 level against the Yen, taking down AUD/USD to 0.9965 for session lows, and EUR/USD around the 1.2960. USD/JPY posted a fresh 5-year high at 102.15, while NZD/USD broke below the 0.8270 mark to a 7-week low.
Read more Previous

China Apr Industrial Production (YoY) up to 9.3% vs 8.9%

Read more Next
Start livechat