Tuesday, February 23, 2010

EUR/USD failing to push through 1.37 price

These are the posts I enjoy writing the most. Posts about trade analysis whether that be fundamental or technical. This time it's a little bit of both which is quite odd for me because I usually lean more towards one or the other.

At the moment I only trade the EUR/USD but this is only very temporary. It's just that my broker has a very tight spread on this pair compared to the other ones.
The last time the EUR/USD was valued at 1.37 was the 6 days ago on the 17th of this month, ever since it has been trading sideways below that price but above 1.34[44]. The main reason why is because news is very mixed right now regarding this pair. The credit worries from the EU pulling investors back into the save havens of the USD and the data coming from the US that is not all that rosy. In the end it's all a big mess for investors on both sides, making this pair not very volatile, thus scratching the head on what to do next.
But that's going to change.
The main indicator that let me know is the rise in the USD overall is the USD index (the index that weighs the USD against a basket of other major currencies).

It's on the rise despite the fact the pair is still trading sideways. Tomorrow some important data comes out regarding US home sales, prior at -7.6% while 2.23% is expected which will probably be kicking around the currency a little bit with Durable Goods Orders reports on Thursday (survey 1.5% prior 1.3%) topping it off with US GDP QoQ Friday with an annualized survey at 5.6% prior to 5.7%.
So a lot is going on this week. I still think that all the pressure that's on the EUR will make the pair trade downwards in the next couple of days, towards a target point of 1.33 (as mentioned in a previous post). Remember last year the EUR/USD pair traded in the 1.28/1.29 range, and that was without the trouble news from Greece and some of bad news from the rest of the EU's weaker members. I still maintain a sell position on this pair.

 

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