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EURUSD Makes New Lows As Trend Down Continues
The London fix pushed the EUR/USD (FXE) lower in the last few minutes. From a technical perspective the price rally off the earlier NY low was pretty uninspiring (bearish), falling short of the 38.2% of the last leg down in the pair at the 1.2608 (and well short of the 1.2623 -29 correction target outline in the prior post). The next target to get below is the 1.2557-60 where the 61.8% and 200 hour MA are currently found. A move below and there should be continued selling momentum. Resistance now at 1.2594 (midpoint of the move up from the June 12th low). The 100 hour MA (blue line at 1.2585 currently), may also be used by aggressive sellers in the trend move down.
EURGBP and EURJPY selling is helping contribute to the presssure in the pair. EURJPY has next target support at the 99.06 area (see chart below)
For the EURGBP, the next target support is at 0.8021 and 0.8010.
http://www.forexlive.com/blog/2012/06/18/eurusd-makes-new-lows-2/
GBP/USD Tests 38.2% Retracement Of The Move Up From Friday.
The GBP/USD (FXB) opens NY with the price at the 38.2% of the two day rally. Friday the pair was the big winner with an insatiable demand. The election results led to a gap higher bid in sympathy with the EURUSD, but the price found channel trend line resistance at the level (see daily chart below), and the selling began. The price decline has been steady but has found support buyers at the 38.2% of the move up from Friday (see chart above) at the 1.56376 level. Overall, with focus back on the negative of the EURUSD, the GBPUSD may find some more dip buyer against support.
On the topside today, I will be watching the 1.5661 level above as a key level for trader sentiment. The level is the 38.2% of the move down from the April high. . The price zipped above this level on Friday. In the last few hours, the price has been able to hold below this level. If the price stays below, it keeps the bears in control. If the price can move above, the flight into the GBP may continue to be a theme.
http://www.forexlive.com/blog/2012/06/18/gbpusd-tests-38-2-retracement-of-the-move-up-from-friday/
EURUSD Back To Friday's Range
The EUR/USD (FXE) starts the NY session within the trading range from Friday. The gap from Friday to Monday was filled. The price high came in at 1.27487 - short of the first key target at 1.2778-84. Similar to last weekend when the Spanish bank bailout was announced, the high came in the 2nd hour of trading today, followed by a steady sell off.
From a technical perspective, the price is opening NY below/around the 38.2% of the move up from the June 12th low at 1.26294. The underside of the trend line from the low comes in at the 1.2635. The pair has lows for the day at the 1.26176, 1.26136 and is just making new lows. Off the 1st low reached in London at 1.26176, the correction held the 38.2% at the 1.26581. This increases the negative bias for the pair in the early hours of NY. The reality of Greece - despite the leadership - continues to be a problem.
There will be continued headlines coming out of Greece with governments officially forming. If there is a rally off a headline I would expect sellers against the 1.2667 level. This is the 38.2% of the move down from the June 1 high and proved to be a resistance level for this month (prior to the gap higher over the weekend).
The next key downside target comes in at the 50% at the 1.25934. The low from Friday at the 1.2591 and 100 hour MA (blue line in the chart above), makes the level a key support level for the pair (with a stop below the 100 hour MA at the 1.25814 (and rising). I would expect the decline to stall around this level (for the day that is), as the market prepares for the next key event, the FOMC interest rate decision on Wednesday. Overall, however, with the election over and a Greek default for the time being at least avoided, the good news is over. So I would expect the sellers to be more comfortable selling on rallies against key levels.