Forex commentary EUR/USD January 10, 2012
Forex EUR/USD commentary January 10, 2012
The euro found substantial support at the daily level of 1.2667 and has made a nice 100+ pip move up which leaves the door open to test the next level higher around 1.2900 considering the daily charts. Intraday it does look to have some work ahead to bust thru the 1.2800 level. There really is no fundamental reason for a run up in the pair. I figure it’s a short covering going on and since the CFTC reported another record in retail shorts last week it doesn’t surprise me. There are several bond auctions being held in the EZ this week also with Italy and Spain being the ones that will be watched closely by traders. Italy on Thursday and Spain on Friday.
There has also been several articles about Greece and its eminent default however the conflicting press releases by the powers at be still continue to reject the idea. However Merkel did say at the press conference after her meeting with Sarcozy yesterday that Greece will not get its next tranche of bailout money if it doesn’t speed up the bond swap process and hold up to its past promises. The way I see it is Der Spiegel hit it well on the mark (Here). Greece is screwed to put it lightly. Its only a matter of time.
If the Euro cant make a decent rally today and at least close above Fridays highs then I would be more inclined to think the break thru support is more likely in the near future. Considering the increase in volume traded on my daily chart it sure looked to be a lot of selling into yesterdays rise. So far this morning the Asian market doesn’t seem willing to push thru the 1.2780 level but it is still early in the day. Japan is back online today after its lengthy holiday so it will be interesting to see what they have in mind on the Euro today.
Intraday i am looking to see any intent in either direction and keeping my mind open. After the rise during the US market after London closed yesterday anything is possible. As I am typing it’s looking more like Asia may push down. There is a possible stop run and will have a nice jump down this bar. Will be looking for the faded move or full retrace of the jump down for more information.
Good luck and be careful out there.