Friday’s Technical Analysis: EUR/USD

Friday’s Technical Analysis: EUR/USD

Current Mark- 1.0968

The uptrend is intact with Thursday’s new high at 1.1016, but the target is remains set at 1.1083.

Intra-day support is projected at 1.0950, followed by the Key support  at 1.0870.

If the 1.0819/45 support zone breaks, the next is at the 78.6% Fibo retracement at 1.0675, then the March low at just above 1.0460, then parity at 1.0000

Chart courtesy of DeltaChart.com

Commentary

The USD’s rally is slowing as traders look to a Fed meeting next week to renew bets on US policy divergence from Europe and the rest of the world.

Momentum behind the Buck’s 2% advance this month is starting to weaken, with traders paying the least to protect against declines by the Euro Vs the USD since November.

Positions that would benefit from further weakness in the single currency were unwound after Greece reached an agreement with its creditors and moved closer to receiving a third bailout.

The USD fell 0.5% to 1.0984 per EUR as of 5 p Thursday. in New York, after reaching 1.1018, the weakest mark since 15 July.

The Dollar Spot Index, which tracks the Buck Vs 10 of its major peers, was down 0.1% at 1,206.64, after trading near its strongest mark since April Wednesday. The USD pared earlier losses while remaining weaker after a report showed the fewest Americans in 40 yrs filed applications for unemployment benefits last week, possibly supporting Fed moves to raise interest rates this year.

EUR rose Vs most of its peers as Greece prepares for bailout talks. The 1st representatives of the nation’s official creditors arrive in Athens Friday.

The relative cost of protecting against a EUR decline Vs USD in 6 months has fallen to the lowest in 8 months. The premium on contracts to sell the shared currency over those to buy dropped to 1.1 percentage points Thursday, risk reversals show, after climbing to 3.3 percentage points on 22 June, the most in 3 years.

Technical analysis

 After finding a trading system that works for you, the more cryptic and esoteric fields of study can then be incorporated into your technical and trading toolbox.The bottom line when utilizing any type of analytical method, technical or otherwise, is to hold to the basics, which are methodologies with a proven track record over a long period.

Technical analysis is a method of forecasting price movements by looking at purely market-generated data. Price data from a particular market is most commonly the type of information analyzed by a technical trader.

Have a terrific weekend.

Paul Ebeling

HeffX-LTN

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