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The U.S. dollar started the day on the back foot versus most competitors, but managed to reverse losses at the beginning of the American session as risk sentiment eased after the IMF lowered its global growth forecast and ahead of the U.S. debt ceiling vote.

The euro continued to trade in a choppy manner versus the dollar, driven mostly by market's sentiment but unable to break either side of its recent range. Meanwhile the cable managed to recover from a fresh 5-month low o 1.5800, while the yen failed to consolidate intraday gains and trades nearly flat versus the greenback.

US stocks were mostly higher as lawmakers prepared to vote on the nation's debt ceiling and after earnings from Google Inc. and International Business Machines Corp. beat estimates.

Euro gravitates around 1.3300. 1.3400 key level on the upside

The euro has continued to oscillate on Wednesday, as it failed to break above the 1.3350 resistance area and instead saw a quick setback toward a weekly low of 1.3263 during the New York session. At this point, short-term indicators look neutral as EUR/USD has been trading within 1.3250/1.3400 for over 2 weeks.

However, on a longer-term perspective, the pair holds a positive bias but the euro needs to clearly break above the 1.3400 resistance level determine a strong directional bias.

"The EUR remains a range trade to us, like many other majors at the moment. For EURUSD key levels to watch remain the same as last week: 1.3250/60 on the bottom and 1.3400 on the top", says the TD Securities team. "Ultimately we favor a topside break".

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.