EurAnalysis

EUR/USD unchanged around 1.3000

FXstreet.com (Barcelona) - EUR/USD is last barely below the 1.30 handle, more or less unchanged from previous weekly close Friday, off recent session lows at 1.2970, printed during the interbank pre-market. Mentioned low is 50% Fibo retrace of latest intraday up leg from Friday's lows pre-NFP at 1.29 round to Friday's fresh 9-day highs at 1.3040.

Friday's post-NFP highs were still slightly below March 25 highs at 1.3051 when Cyprus bailout deal was agreed, then followed by unfortunate comments from EU's chairman that were understood as if Cyprus case was going to be a “layout” for future EZ banking crisis. Not much of a reaction from news coming this weekend out of Portugal, while Yen keeps making new multi-year lows, also against EUR, with EUR/JPY cross above 128, highest in 3 years.

Immediate resistance to the upside for EUR/USD shows at recent session highs 1.3009, followed by Friday's highs at 1.3040, and March 25 highs at 1.3050. To the downside, nearest term support lies at recent session lows 1.2970, followed by March 08 lows/Thursday's highs/61.8% Fibo retrace of same mentioned intraday up leg at 1.2950, and Friday's lows/March 26 highs at 1.2890/8.

too sleepy to to ball-eye it..I just wake up and wait to close it
"21 green pips" signs it's perfect week for you to trade

AMEN

Well it looks like there's not much to see here at the moment, so I'm off to snooze.
Back for London open.

Nitey nite PT

1. EUR/USD dropped to 1.2962 in early Asia when USD moved higher led by USD/JPY
2. Weekend reports indicating Portugal facing budget challenges also weighed
3. EUR/JPY buying has lifted back to Friday closing level just under 1.3000
4. EUR/USD supported by fading expectations Fed will scale back QE
5. Weak EZ economy and sovereign debt issues will likely cap upside
6. Resistance at 1.3050 Mar 25 high; break targets 38.2 of 1.3711/1.2740 @ 1.3111
7. Support at 200-day MA at 1.2895/1.2900

Short @ 1.2990

Long @ 1.2999

Looks likes pips for me.

Now watch Ms Market trade between 1.2990 and 1.2999 for the rest of the night.

Why Did the Euro Rally After the ECB Statement?

Let's face it, expectations were set pretty dovishly for the ECB rate decision. With disappointing economic reports coming out day after day and the Cyprus bailout deal reigniting concerns about the euro zone's debt problems, traders were expecting a pessimistic statement from Mario Draghi. And to a certain extent, Draghi did deliver.
He might not have announced any changes in monetary policy, but he did mention that policymakers went through an "extensive" discussion of interest rates and that the ECB stands ready to act if the need arises. Am I the only one that smells a rate cut coming?
In assessing the economy, he also added that economic weakness spilled over into early 2013, and he basically gave an uninspiring outlook for the region, citing downside risks to the economy.
Yet in spite of all this, the euro managed to end Thursday on an extremely strong note. What led the euro to stage such a crazy comeback?
http://www.babypips.com/blogs/pipono...406/eurusd.png
Draghi assures the markets that Cyprus is "no template" for future bailouts.

The markets were spooked out when they learned about the deal that Cyprus accepted to secure its bailout loan. I mean, who wouldn't be? It involved raiding the savings of depositors for crying out loud! Investors were afraid that this agreement would lead to a bank run and might set a precedent for future bailouts.
But in the press conference following the rate decision, Draghi responded to these concerns by saying that "Cyprus is no template." What this basically means is that what was applied to one country will not necessarily apply to another, so there's no need to worry about the governments reaching into depositors' coffers again.
Furthermore, when asked what would happen if a country were to exit the euro zone, he answered that there is "no plan B," which suggests that European officials will do all they can to keep the region intact. This strong resolve to keep the euro zone together seems to have inspired confidence in the markets because what followed next was a massive euro rally.
Short squeeze on the euro?

Many believe that the ridiculous rally we saw on the euro was the result of a short squeeze. For those of you who are unfamiliar with the term, a short squeeze occurs when sellers are forced to cover their short positions, resulting in a sharp rise in price. It's basically like hitting the NoS on a racecar for an added boost!
Some think that the massive move we saw on EUR/JPY might have also had spillover effects on EUR/USD. After all, EUR/JPY climbed over 500 pips on Thursday, the largest single-day rally on record!
When buyers started to push EUR/USD higher, it could have triggered some stops, which in turn increased market bullishness and lifted price up to new heights.
No doubt, the euro's performance that day was extremely impressive - one for the books. But with the prospect of a rate cut looming over the shared currency, one can't help but wonder if these gains will eventually be erased. Do you think the euro has what it takes to continue trading higher?

Great review of what probably happened. Would you mind posting this on my thread on AG as it would be very helpful for discussion purposes.

Thank you and Good Night.

Thank you Currency Man. The article is now posted at AG on your thread.

JD

You partaking of this Yen action? I don't touch it usually but this is candy.

No brother I am not. I trade just one pair and focus on it. I try to master one thing vs being a Jack of All Trades. I am not that good.

I even eat on thing at a time and prefer divided plates. Alas I am a one trick pony

I hear ya bud, but sometimes this market throws no brainer trades. This one like the CHF interventions last year.

Just saying... but whose gonna buy the yen now...?

I hear you bro loud and clear but I must stay laser focused at the task at hand and here is why:

Often to make a difficult decision I usually break it down into simple parts.

The 3 pillars of trading are FA / TA / MM

To me market movements are more than TA.

Sure I am 100% confident in my MM pyramid for sizing and 5&15 as my main TA triggers in any market. That covers 2 of the pillars TA & MM.

For the last and certainly not least pillar FA I would have to spend time understanding the macro economics of both counties before I place any capital at risk.

Even with a good grasp of the Euro and US there is always risk that cannot be mitigated.

How much greater would the risk be if I went in half cocked? It took months for me reading everything I could about the Euro before the light got brighter in my head. Since I dont have all 3 pillars in alignment I have to pass regardless of the greed. It all goes back to those painful financial lessons of loving the market more than greed. Greed has lead to the premature death of many trading accounts of really skilled traders better than me.

Now for who is buying....My friend, my FX brother to have a transaction there must be a buyer and seller. If its retail selling then maybe the big boys are buying. The COT may shed some light on that.

Forex Flash: EUR/USD next upside target near 1.3115 - BBH



FXstreet.com (Barcelona) - The US Dollar Index reversed lower on Friday, after being faced with weekly supply area at 83.50, which was rejected to the pip on the first test since July 2012.

According to Marc Chandler, Global Head of Currency Strategy at BBH, "a break now of the 81.70-82.00 band would suggest a deeper correction has begun that could carry it to around 80.70, initially."

Marc adds: "The Dollar Index is heavily weighted toward the euro, so it is not surprising that technically, the euro looks constructive." Next upside target comes near $1.3115, he says.

"Although common this year for the euro to move in the opposite direction on Monday from the previous Friday, this constructive technical tone is likely to be maintained, provided the $1.29 holds" March concludes.

Well brothers old JD needs his beauty sleep because I aint getting any better looking but I am getting richer walking to wealth one good trade at a time.

See you later and I hope you are all gagging on green pips when I see you later.

thx for your post , and have a nice dreams

i get u. but fibre and chf has -1.00 correlation and it will always affect chf cos of the "usd"
the way i see it once EU looses ,USD gains so any news affecting EU postively would invariably
have a negative effect on the CHF cross.
NOTE: this only works for chf cos of correlation.

my broda no one.am dumping that usdjpy now

closed short 1.2970