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27 Aug 2015
EUR/USD: Break of 1.13 around the corner?
FXStreet (Bali) - EUR/USD continues to be clearly dominated by sellers in the European morning, now approaching the 1.13 lows after a 50+ pips decline off 1.1365 session highs.
Text-book liquidity grab earlier in Europe
The pair saw an early spike in Europe, with the smart-money jumping in the short-side bandwagon as soon as a break of 1.1355/60 Asian resistance was broken, in what should be understood as a classical grab of liquidity before resuming the prevailing downward momentum.
Down is the way to go as long as risk stay on
If one has been following the market dynamics over the past few weeks, a new notion of understanding currency moves based on risk conditions has emerged, with the Euro and Yen becoming the safe-haven currencies, while on the flip side, the US Dollar and the commodity complex (AUD, NZD, CAD) are being punished the most. By the same token, the opposite is true if risk friendly dynamics settle in.
EUR/USD technicals
Given the massive vacuums created by the semi-parabolic rise in the EUR/USD in recent weeks as 'risk-aversion' got uglier and uglier, a recovery of 'risk-appetite' should translate on further interest for downside bets, with 1.1290/1.13 now the area to be defended by the decreasing number of bulls - given the current environment -, with a resolution below mentioned level probably exposing an acceleration with the next big intraday target at 1.12 round number. On the downside, as long as 1.1355/60 is protected, this now looks like a sellers' market.
Text-book liquidity grab earlier in Europe
The pair saw an early spike in Europe, with the smart-money jumping in the short-side bandwagon as soon as a break of 1.1355/60 Asian resistance was broken, in what should be understood as a classical grab of liquidity before resuming the prevailing downward momentum.
Down is the way to go as long as risk stay on
If one has been following the market dynamics over the past few weeks, a new notion of understanding currency moves based on risk conditions has emerged, with the Euro and Yen becoming the safe-haven currencies, while on the flip side, the US Dollar and the commodity complex (AUD, NZD, CAD) are being punished the most. By the same token, the opposite is true if risk friendly dynamics settle in.
EUR/USD technicals
Given the massive vacuums created by the semi-parabolic rise in the EUR/USD in recent weeks as 'risk-aversion' got uglier and uglier, a recovery of 'risk-appetite' should translate on further interest for downside bets, with 1.1290/1.13 now the area to be defended by the decreasing number of bulls - given the current environment -, with a resolution below mentioned level probably exposing an acceleration with the next big intraday target at 1.12 round number. On the downside, as long as 1.1355/60 is protected, this now looks like a sellers' market.