Trading on the dollar pairs has been dancing along narrow ranges all morning. Last night, when positive data from US Unemplyment and the Philadelphia Manufacturing Index came out, the dollar sold off on sentiment that the US recession is nearing its end. However, at around 1:30am today, investors and traders ran towards the dollar as news about some Italian banks under review and possible downgrade by Moody's.
The EUR/USD also hit a wall on 1.40 which seems to be a very strong resistance.
EUR/USD
On the daily chart, this pair looks like a tiny dodgie primed for a breakout. Question is, which way?
So, for today, I will be placing a couple of 'ambush' entry order positions at 1.3930 (for a LONG position) and 1.3871 (for a SHORT position).
The only fundamental event for today is the German PPI due this afternoon which is expected to be bullish for the EURO. This could be the catalyst that will give this pair an upward kick.
However, prevailing problems on the European banking sector still casts a shadow over the Eurozone. Any further negative news concerning this will definitely cause a flight to the safety of the dollar.
Proud and Hoping
15 years ago
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