FXstreet.com (Barcelona) - Euro bulls are imposing their
presence on Wednesday, after a sudden burst of risk appetite has
pushed the single currency above 1.3000 against the greenback,
albeit the reasons behind this firmer tone in EUR/USD are still
unclear. There were no upbeat results out of the euro zone that
could have justified such a move. Moreover, markets have traded
unbiased overnight and minutes before the opening bell in London.
So, here we are once again: euro is marching north, but nobody
knows why! Fundamentals are pointing to the opposite direction, but
markets do have their own psychology, do they not?
… Temporary, or long-lasting break?
Of course, this euro comeback to the 1.3000 region merits the
one-million question whether this up-move is framed within a sea of
new buying orders than can effectively propel the shared currency
far above the psychological mark, or it is just another soulless
attempt of reaching higher ground before reality devours it.
With Greece talks about the new austerity package in the headlines,
analyst Derek Halpenny at BTMU comments "experience tells us all
that we should expect some deal in November, which will help
support near-term confidence to a degree. But even assuming best
case scenarios in regard to muddling through, growth is weakening
in the euro-zone and hence the upside for the EUR/USD rate remains
very limited indeed". Karen Jones, expert at the German lender
Commerzbank, gives credit to a retest of the zone at 1.3025/45 in
the upcoming sessions, but she warns, "we would expect failure here
and consider that attention remains on the 1.2803/34 (200 day ma
and October low). Failure here would be viewed as negative, and
The Bullish Percentage Index (
) at FXstreet.com continues to navigate below the 50 threshold,
however evidencing a slight upside, showing at the moment that
42.11% of euro based pairs remain in bullish mode according to
point and figure charts.
In the very near term though, markets are anxiously waiting for the
reopen of the US markets, after two days of inactivity because of
the Hurricane Sandy. Bouts of volatility and fireworks would be
almost guaranteed, as the month-end flows would also add to the
… Empty docket for the EU tomorrow
Action on Thursday will kick in with the "official" NBS
Manufacturing PMI in China, expected to return to expansionary
levels above 50 and putting risk trends to the test, ahead of the
Swiss SVME PMI and retail sales in the Alpine economy.
Manufacturing PMI in Greece will close the euro calendar, preceding
the US ADP employment report, manufacturing PMI, ISM Manufacturing
index and the weekly report on the labor market.