Flat on the euro. Are we missing something?
The EUR/USD sustained further losses during Tuesday’s sessions following a retest of the 1.19 handle as resistance. As you can see, the day ended with H4 price ripping through the lower edge of a H4 demand pegged at 1.1836-1.1854. One can almost feel the pain caused by this move as stop-loss orders were highly likely triggered here. Better-than-expected US consumer confidence, a strong dollar and comments from Fed Chair designate Powell regarding a possible interest rate hike in December, all contributed to yesterday’s selloff.
Although the pair crossed below daily support at 1.1878 yesterday, which according to the daily timeframe shows further downside could be possible to as far south as daily demand seen at 1.1712-1.1757, let’s keep in mind that there is a weekly support area at 1.1880-1.1777 also in play.
Suggestions: To our way of seeing things this is a difficult market to trade. It would be a chancy move to sell into the current weekly support area, regardless of where daily and H4 price is trading. Likewise, we would feel uncomfortable buying this unit knowing that H4 demand was recently whipsawed, alongside daily action showing room to press lower after crossing below daily support.
Considering the above, the team has decided to remain on the sidelines for the time being.
Data points to consider: German prelim CPI m/m; Spanish flash CPI y/y at 8am; US prelim GDP q/q and FOMC member Dudley speech at 1.30pm; Fed Chair Yellen testifies and US pending home sales m/m at 3pm GMT.
Although the pair crossed below daily support at 1.1878 yesterday, which according to the daily timeframe shows further downside could be possible to as far south as daily demand seen at 1.1712-1.1757, let’s keep in mind that there is a weekly support area at 1.1880-1.1777 also in play.
Suggestions: To our way of seeing things this is a difficult market to trade. It would be a chancy move to sell into the current weekly support area, regardless of where daily and H4 price is trading. Likewise, we would feel uncomfortable buying this unit knowing that H4 demand was recently whipsawed, alongside daily action showing room to press lower after crossing below daily support.
Considering the above, the team has decided to remain on the sidelines for the time being.
Data points to consider: German prelim CPI m/m; Spanish flash CPI y/y at 8am; US prelim GDP q/q and FOMC member Dudley speech at 1.30pm; Fed Chair Yellen testifies and US pending home sales m/m at 3pm GMT.
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