By TraderVox.com
Tradervox (Dublin) – The US Dollar index is trading at monthly highs of 79.93. The dollar opened the day in tight trading lingering around the 80 mark which served as a strong resistance. Moving into the day the dollar fell on the better than expected German trade balance data to find support at 79.87. The dollar then saw a sharp bullish correction to 79.93.The dollar likely to hold onto to the 79 level due to high risk sentiment preventing any downside movement. Any upside movement will face strong resistance at 80 levels, a level which the dollar will it difficult to break as the fears of another round of quantitative easing are looming around after last week’s weak Non Farm Pay Rolls data.
The EUR USD is currently trading in tight markets with bearish sentiments dominating. The bearish trend is not very strong and there is no sufficient volatility to cause to a major sell off in the EUR USD pair. The 10 day moving average and the 20 day moving average are showing sharp bearish divergences while the RSI is lingering at levels near to the oversold region. This oversold criterion and the presence of many long EUR/USD barrier options at around the 1.29 level is supporting the pair and helping it to hold onto to the 1.29 level.
The pair is currently trading at 1.2977 levels and any upside movements in the pair is likely to be limited by the strong resistance at 1.2994. To the downside the support first support lies at 1.2962 and a selling here would drive the pair to 1.29471, the low of January 25th.
Moving onto the longer time frame, the EUR USD bears are very strong supported by impressive volatility numbers. This will likely see the EUR/USD see a sharp drop in value to touch 1.288 levels in the coming weeks.
The economic calendar has not charted out any major market moving events for the day and this will further help the Euro to hold onto the 1.297 to 12.96 levels as the pair moves into the US session.
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