The Euro came under intense selling pressure during last week’s trading action and broke below all important support zones which was seen as a huge positive. The Euro in the early Asian morning session is seen trading flat with a positive bias but many traders believe, it might just be a profit taking rally and the overall trend for the currency remains down. The statements from the Federal Reserve as part of its policy statement with regards to short term interest rates were seen as a huge positive for the dollar.
On the back of strong initial jobless claim numbers and a hawkish statement from the Federal Reserve, the dollar index was able to breach the 90 level marks, it is imperative to state that the dollar continues to form higher highs against most major currencies. Statements from high ranking European Central bank official about the ECB introducing its own version of quantitative easing as early as January is seen as negative for euro.
Traders and investors would shift focus to the release of the US GDP numbers on Tuesday which would provide an insight into the strength of economic growth of the US economy. Traders believe a strong US GDP number would be a negative for the precious metal in the near term.
When looking at the daily chart for the EUR/USD, the currency pair continues to form lower lows and lower highs which is indicative of the strong selling momentum present at current levels. The relative strength index, along with the momentum indicators for the EUR/USD continues to trend lower which is a bearish indicator. The EUR/USD continues to trade below all important daily moving averages.
Short EUR/USD at current levels for an intermediate target at $1.217850 with a strict stop loss above $1.22959
With over 20 years’ experience in the heart of the investment industry, Ben Myers has become one of the most respected commentators in the financial world. Having worked for global institutions such as HSBC and Bank of Ireland, Ben ran his own successful investment company in the UK before becoming chief analyst at ECMarkets and now YesOption. Ben remains a keen forex and binary options trader and is a regular featured analyst for a number of online news portals including bbc.com, investing.com, and was responsible for YesOption winning the Best Technical Analysis Award 2014 from DailyForex.com.