By Fast Brokers – The EUR/USD is consolidating above Friday lows as the currency pair tries to form a new base during a trading session with little economic data. The EUR/USD has taken a considerable hit this month due to a combination of deteriorating conditions in some EU member states and strong economic data releases from the U.S. The concept that the Fed will begin reigning in its alternative liquidity measures has led to a bull run in the Dollar, dragging the EUR/USD below 1.45. The EUR/USD sank below our previous 1st tier uptrend line in the process, which runs through July lows. Hence, if the EUR/USD can’t make a strong rally above what is now our 2nd tier uptrend line soon, the currency pair is exposing itself to the possibility of a more extensive contraction towards the psychological 1.40 level. Meanwhile, the newswires will heat back up tomorrow as investors receive a bit of data before Christmas. The EU will kick off the session with its GfK Consumer Climate figure, followed by Final GDP and Existing Home Sales from the U.S. Any disappointing economic data from the U.S. could help the EUR/USD recover some of its December losses. However, more impressive data points could drag the currency pair lower as investors gain confidence in America’s economic recovery.
Technically speaking, we’ve readjusted our downtrend lines to compensate for the EUR/USD’s most recent pullback. As we mentioned previously, if the currency pair doesn’t pop back above our 2nd tier uptrend line we could be witnessing a technically significant reversal since our 2nd tier runs through July lows. Hence, the EUR/USD could be in the midst of a more protracted downturn. We’ve installed a new 1st tier uptrend line running through Friday’s base to give investors an idea of an immediate-term support level. As for the topside, the EUR/USD faces multiple downtrend lines along with technical barriers in the form of the psychological 1.45 level and 12/16 highs.
Present Price: 1.4356
Resistances: 1.4386, 1.4412, 1.4430, 1.4447, 1.4475, 1.4504
Supports: 1.4347, 1.4328, 1.4309, 1.4297, 1.4274, 1.4249, 1.4235
Psychological: 1.45, 1.40, 1.50, October Lows
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
