| Trade Ide EUR/USD intraday: the upside prevails. |
Pivot: 1.287
Our preference: Long positions above 1.287 with targets @ 1.295 & 1.2995 in extension. Alternative scenario: Below 1.287 look for further downside with 1.2815 & 1.2785 as targets. Comment: the pair is facing a pull back ahead of further advance. |
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Euro Extends Gains Following Court Ruling
The euro shot up to a fresh four-month high against the US dollar yesterday, following a German constitutional court ruling that supported the ECB’s plans to combat the euro-zone debt crisis. The court ruling also resulted in other higher-yielding assets extending their bullish trends throughout the day. Today, the main piece of news is likely to be FOMC Statement, scheduled for 16:30 GMT. Speculations that the Fed will initiate a new round of quantitative easing have kept the dollar bearish recently. If the Fed does announce a new round of quantitative easing today, the greenback could see additional losses in afternoon trading.
Economic News
USD – FOMC Statement Could Lead to More Dollar Losses
The US dollar saw minor upward movement against several of its main currency rivals yesterday, but remained bearish overall amid speculations that the Fed will announce new steps to boost the US economic recovery today. The USD/CHF gained close to 40 pips during mid-day trading to reach as high as 0.9378, just above a four-month low hit earlier in the week. Against the Japanese yen, the dollar advanced more than 20 pips to trade as high as 77.95, just above a recent three-month low.
Today, traders will want to pay careful attention to the FOMC Statement, set to be release at 16:30 GMT. US economic indicators have largely come in below their forecasted levels in recent weeks, leading to an increase in speculations that the Fed will need to take steps to boost the US economy. With a number of analysts predicting that the Fed will announce those steps today, traders can anticipate heavy market volatility during the afternoon session. Should the Fed announce a new round of quantitative easing, the dollar could extend its recent losses.
EUR – Euro Turns Bullish amid Risk Taking
A German constitutional court ruling in favor of the ECB’s plans to lower borrowing costs in the euro-zone led to risk taking among investors yesterday, and resulted in significant gains for the euro. The EUR/USD advanced more than 70 pips during the first half of the day to reach 1.2934, a fresh four-month high. The EUR/AUD also shot up more than 70 pips to trade as high as 1.2336 during the afternoon session.
Today, euro traders will want to pay attention to a batch of US news, specifically the FOMC Statement and Economic Projections. If the Fed announces new steps to stimulate growth in the US economy, investors may continue shifting their funds to riskier assets, which could lead to additional euro gains. That being said, if the Fed decides not to take any new steps today, the common-currency could reverse some of its recent bullish movement.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Visit Us www.deryworldscorp.web.id
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